Given all that, predictions have surfaced that the long-awaited boom in fixed immediate annuity Sales never will materialize.
For the last 10 quarters, independent producers and captive agents have dominated the fixed immediate sales of participants we have studied.
It is interesting to note that fixed immediate sales by independent producers are negatively correlated with interest rates.
By contrast, captive agent sales of fixed immediate annuities have increased steadily over the last 10 quarters, more than tripling from first quarter 2003 to second quarter 2004.
It may well be that fixed immediate annuities are particularly well-suited for this channel because the sales process is closer to that of permanent life insurance than to deferred annuities, which are often sold with more of a transaction orientation.
Also, some of the most innovative carriers have focused on this channel; these carriers have introduced new product features designed to overcome the limitations of a traditional fixed immediate.
As a group, broker-dealers accounted for about 19% of fixed immediate sales in the first half of 2005, up from 16% in first half 2004 and 18% in 2003.
More than any other kind of producer, registered representatives are said to dislike the fixed immediate annuity's lack of liquidity and flexibility, as well as loss of asset control upon annuitization.
Immediate annuity sales through independent broker-dealers have increased steadily over the last 10 quarters, as more independent broker-dealers have embraced retirement income planning and more carriers have focused on educating the financial planners they serve.
Banks are also said to be a difficult channel for fixed immediate annuity sales.
The sales problem here is the perceived complexity of the immediate product.