Those who sell the most indexed annuities are more likely to target consumers between the ages of 40 and 49. These advisors are also more likely to present annuities to clients with medium-risk investment appetites, and they have clients who pay for annuities through a wide range of sources, a new survey finds.

The findings, contained in The Future of Retirement Income survey released by Genworth Financial, reveal that high-volume IA sellers are more likely to target investors with a moderate risk tolerance than they are to chase after conservative investors.

“The findings suggest that producers need to consider a broader target profile for annuity prospects,” said Charlie Gipple, national director of indexed products with Genworth Financial. “Successful sellers are recommending annuities to younger, more risk-tolerant consumers and positioning them as a vehicle for a wider array of retirement funds.”

Clients who invest in annuities also tend to do so through qualified retirement savings, money market accounts, certificates of deposit and bonds and through exchanges of other annuities, the survey found.

Sales of indexed annuities broke through the $10 million mark in third quarter 2013 for the first time, an increase of 15.1 percent over the year-ago period, according to Beacon Research. The outlook for IA sales remains strong, Beacon also said in its Fixed Annuity Premium Study.

Many analysts expect interest rates to rise in 2014 as the Federal Reserve eases up on its bond-buying program. Higher interest rates mean more income for annuity investors.

The Genworth survey also revealed good news for future annuity sales. A total of 68 percent of people who don’t own annuities have a “neutral to positive” impression of the investment product, and many investors who would consider an annuity have never been presented with the opportunity to do so, the survey found.

“Many financial professionals simply don’t present annuities to their clients, perhaps believing that these products have a bad reputation among consumers,” Gipple said in a news release.

Some consumers are hesitant to purchase an annuity. For example, 58 percent of consumers believe they already have enough predictable income to satisfy their retirement needs and therefore don’t need an annuity. Slightly more than half of consumers who said they were considering annuities had second thoughts because they would rather invest directly in the market – a potentially risky move for money intended to provide income for a lifetime. A nearly equal percentage of consumers said they object to annuities because they are uncomfortable with a product where they can’t access their money without penalty for a period of time.

However, 78 percent of those who do own annuities said they are satisfied with their access to their funds.

The takeaway from this is that the more consumers learn about annuities, the more they like them. And those who do own annuities have better opinions of annuities than those who do not own annuities. The survey showed that 91 percent of annuity owners had positive or neutral impressions of annuities, compared with 68 percent of nonowners. Of those annuity owners, 70 percent said the annuity’s expenses are worth the benefits they are receiving from it. So, providing annuities to your clients and prospects may not be such a challenge as many sellers believe it to be.

The ideal annuity candidates, according to Genworth, have several traits in common. In general, they:

» Like to work with financial professionals. Eighty-nine percent of annuity owners who have positive perceptions of annuities work with a financial professional, as do 69 percent of those who view annuities positively and are considering an annuity.

» Engage in personal research. Slightly more than half of the annuity owners surveyed said they do their own research on their financial advisor’s recommendations before making decisions.

» Value downside protection and upside potential. Sixty percent of annuity owners and 61 percent of annuity considerers said they would pay additional fees to guarantee that an investment would never lose value in a “bad” year while obtaining some growth in a “good” year.

» Have a pessimistic view of the market. Annuity owners said they were significantly less likely to believe the market will show positive growth in the next five years.

» Need a source of supplemental retirement income. Eighty-five percent of annuity owners said that a predictable income stream is critical to their ability to have the kind of retirement they want.

It’s important for annuity sellers to make sure their clients have realistic expectations, the survey indicated. Satisfaction among annuity owners is directly related to how well the annuity they own meets their expectations. Seventy percent of those whose annuity performed as they had expected said they were satisfied with their annuity, as opposed to 5 percent of those whose annuity did not perform as expected.

The message for advisors: Make sure your annuity customers know exactly what to expect before they buy, and they will be more satisfied with their purchase.

Annuities are often more difficult to understand than other investment products, and it has traditionally been difficult for investors to change their annuity investment without paying high fees.

But with Americans living longer and many not having enough assets to last them through retirement, income-producing investments are attractive for investors.

Retirement can be unpredictable. Variables such as market performance, retirement dates and the cost of living can play out in unexpected ways and have a major impact on your clients’ retirement. The Genworth survey showed that an unexpected job loss resulted in 46 percent of current retirees leaving the workforce sooner than planned. This resulted in fewer income-earning years and an adverse impact on their retirement nest egg.

Of the current retirees who were surveyed, 64 percent found their expenses either increased or stayed the same in retirement. “Senior inflation” may be to blame. Prices for products used by seniors – including medical services, home health care and nursing homes – have increased significantly more than the overall consumer price index, according to The Wall Street Journal. With necessities going up in price, retirees have less disposable income to spend on things they enjoy, such as travel or dining out. So much for retirement being “the golden years” that many envision them to be!

This combination of retirees’ leaving the workforce sooner than planned, living longer than expected and facing higher expenses than anticipated means that less retirement money needs to go further. Presenting annuities to clients and educating them about the benefits of owning them can help your clients reclaim their retirement.