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Fixed Annuities Help Investors Get Back to Basics


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vanilla coneIn “Back to Basics: Safe, boring, vanilla. This is the new world of wealth management,” Charles Passy of the Wall Street Journal describes a popular trend of going back to simpler and safer investments.  Wealth managers have always looked for the radical money-making idea.  They are now using old-fashioned techniques in more of a money-saving strategy, techniques which could be considered radical in their own way.  Some wealth managers have been suggesting that their clients put money into bank deposits.  Nothing flashy or exciting, but safe in an economic climate where investors are scared.  From fixed annuities to dividend-paying stocks to bank deposits, the mantra of the times appears to be principal protection with modest growth.

Financial professionals are spending more one on one time with their clients and really assessing their risk tolerance.  There are more workshops promoting clear and concise client education meant to help “calm down” portfolios.  While the conservative approach is not exciting or colorful, it is the best way to go for many investors.  Annuities are growing in popularity, especially for retired clients and those rear retirement.  The lifetime of guaranteed income is a safe sell.  And while these safe investments offer a lot of security, they are not foolproof and are subject to downsides.  The seemingly constant advice of diversifying rings true even in the vanilla world.  Don’t put all of your eggs in one basket.

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