By Bill Broich
The ugly stepchild is ugly no more. Remember when the securities industry blasted Fixed Indexed Annuities (FIA) as a farce, a joke, stupid? No one would buy them and why should they; stockbrokers are the only ones with an opinion that matters.
Guess what, FIA are on fire! In 2013 46% of all fixed annuities bought were FIA. Total sales topped $36 billion dollars with an annual increase over 2012 of over 13%.
Why? Why are FIA making fools of the professional guessers (stockbrokers) who make their living by guessing, guessing what will happen. The answer is quite simple, the driving force behind the FIA explosion are the baby boomers. What do the baby boomers want? Safety, security and stability. What don’t the baby boomers want? Risk, losses, fees and BS.
Income is king and the king’s name is Fixed Indexed Annuities.
According to Sheryl Moore of www.wink.com. The rates are much more attractive on indexed than those other fixed instruments, which has driven demand for them, she said, noting the typical rate on an indexed annuity is now about 5%.
Combining seasonal rates of return with no exposure to risk paints the perfect picture for the unbridled growth of Fixed Indexed Annuities. The growth is expected to continue for years to come as the demand for income continues with the baby boomers.