An increasing number of financial advisers are recommending annuities to address growing concerns about longevity risk, according to Investment Trends' December 2014 Retirement Planner Report.
The report, based on a survey of 617 financial advisers, shows that 38% of respondents were recommending annuities to clients - up from 32% in 2013.
Furthermore, the research shows that lifetime annuities have become the "guaranteed income product of choice" with 39% of participants expressing an intention to use them in 2015. By contrast, 31% and 21% planned to use long-term (five years or more) and short-term (less than five years) annuities respectively.
Reflecting its ongoing prominence in the Australian retirement income space, Challenger products were cited by 86% of advisers who recommended some form of guaranteed income in the past 12 months.
"Planners continue to see a greater role for annuities as part of their retirement advice," said Investment Trends senior analyst Recep Peker.
"In addition to already increasing usage, the intention to use annuities has also increased with 59% of planners intending to recommend annuity products in the coming year, up from 45% saying so in the previous study."
"In recommending annuities, planners are responding to client concerns such as longevity risk. Healthy client interest will continue to buoy planner appetite for annuities in the current low interest environment."