Why are advisors overlooking Peak 65 women’s retirement needs?

A new report shows so-called Peak 65 women are more than twice as likely than Peak 65 men to purchase an annuity if recommended by their financial advisor.

Excuse us for asking, but why isn’t this substantial deviation piquing more advisors’ interest?

According to a study out Tuesday from the Alliance for Lifetime Income, 43% of Peak 65 women — those 61 to 65 years old — with a financial professional who recommended an annuity bought one, compared to 20% of Peak 65 men. The study also revealed that 48% of Peak 65 women are interested in owning an annuity that guarantees them and/or their spouse a regular amount of lifetime income, compared to 37% of Peak 65 men.

Peak 65 refers to a historic demographic moment in 2024, a year when the U.S. will see the greatest surge in the number of Americans turning the traditional retirement age of 65 at any time in its history.

Put plainly, the demand from women in this age cohort is clearly there. What does not seem to be there, however, is the familiarity with the product.

The survey showed Peak 65 men are twice as likely to be familiar with annuities as women. Moreover, 59% of Peak 65 women who work with a financial professional say their advisor doesn’t discuss annuities with them, or if they do, they’re unaware, compared to 44% of Peak 65 men.

Once again, sorry for the question, but with more than 10,000 men and women in America currently turning 65 every day — a number that will increase to over 12,000 before the country hits Peak 65 next year — why aren’t more financial advisors actively targeting this female demographic for annuity sales?

“Today, women control a third of total household assets, estimated at more than $10 trillion. Financial professionals who ignore the unique challenges and needs their female clients face better wake up and find ways to protect their income in retirement,” Jean Statler, CEO of the Alliance for Lifetime Income, a Washington-based nonprofit educational organization, said in a statement. “Speaking from personal experience, if they don’t, those women will most likely go to another advisor who does.”

Christina Nash, founding partner and financial advisor at Knox Grove Financial, part of Osaic, believes women historically have lagged in financial literacy compared to their male counterparts, including in their understanding of annuities. 

“Considering that the expenses and liquidity of annuities have been negatively referred to in the past, I believe many have simply avoided the subject altogether, even though the industry has changed significantly over the past 10 years,” Nash said.

Alexis Zuccaro, wealth adviser with SageView Advisory Group, says women generally have a clear understanding that they’re more likely to live into their 90s and she has increasingly been having conversations with women about hedging against longevity risk.

“If a client comes to me and expresses a fear of outliving her assets, we will walk through a number of solutions that make sense. These can be complex investments that few would understand without professional guidance,” Zuccaro said.

Elsewhere, the study provided a number of other insights into the current life circumstances of Peak 65 women, including the fact that 54% have less than $100,000 in assets, as do 48% of Peak 65 men. Meanwhile, 39% are not partnered — divorced, widowed or never married — and identify vulnerability as a result of having few assets or lower income, compared to 30% of Peak 65 men.

Finally, 34% of Peak women see a 51% or better probability they will live to age 95, compared to 24% of Peak 65 men. This may feed into their concerns about longevity risks, because 53% don’t think their retirement savings and income will last their lifetime, compared to 36% of Peak 65 men, the study said.

“Annuities can be incredibly complex products, so it isn’t uncommon for any investor to required additional education prior to purchase. It’s also incredibly rare for an investor to ask for an annuity by name. For both males and females — working with a financial advisor you trust that’s licensed in both securities and insurance is the best way to determine if an annuity is right for you,” said Nina Lloyd, president of Opus Financial Advisors, part of Osaic.

Howard Sharfman, senior managing director at NFP Insurance Solutions, said that ultimately advisors like himself need to bring more awareness of these retirement products to the female audience.

“These products were built to enhance our clients’ peace of mind, to promote growth to keep up with inflation and to provide the option of protected income that will last throughout their retirement,” Sharfman said.

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