Close to 40 percent of people surveyed said that they did not know anything about annuities or understand how they work. The percentage, which is markedly higher among younger respondents, attests to the inability of the industry to convey not only the operational mechanics of the products they sell, but also the fundamental basics about what they are.
Released as part of Deloitte’s Center for Financial Services’(Deloitte) report, “Meeting the Retirement Challenge: New approaches and solutions for the financial services industry,” the finding illuminates the hurdles the industry faces in preparing people for retirement as well as the dearth of knowledge in the general public regarding adequate financial planning.
Oddly enough, 57 percent of those respondents who were offered advice through their workplace plan provider did not take advantage of the opportunity.
The industry is not entirely to blame for the hands-off approach in the workplace. With changes brought about by the Pension Protection Act of 2006, many employers are wary of incurring liabilities from providing investment advice in the workplace.