Magazine article American Banker

Annuities Taking Up the Slack in Mutual Fund Sales

Magazine article American Banker

Annuities Taking Up the Slack in Mutual Fund Sales

Article excerpt

1994 is shaping up as the year of the annuity at banks. The tax-deferred investment products, which were little known at banks as recently as two years ago, have been strong sellers throughout this year, bankers and investment marketing executives say.

Indeed, annuities sales have eclipsed mutual faint sales at many banks.

Essex Corp., a New York firm that markets investments through 250 banks, says that annuities now account for 80% of it's sales volume, with mutual funds making up the balance.

Last year, the sales picture was exactly the reverse, said Gerald Cunningham, the company's president. "We expect to do well over $2 billion in the sale of annuities this year," he said.

A similar shift is under way at Invest Financial Corp.. which. sells investments through 150 banks.

Annuities now make up one-third of Invest's sales volume, up from 15% in 1993, according to Merlin R. Gackle, president of the Tampa, Fla., company.

Invest has stepped up its annuities training efforts, tutoring bank-based brokers in selling insurance products. At the same time, Mr. Gackle added, "there's no question that our mutual fund sales are nowhere near what they were last year, which is reflective of the industry as a whole."

The rise in annuities sales isn't confined to banks.

Sales of annuities in the first six months of 1994 were 19% higher than in the comparable period last year, according to the Life Insurance Marketing and Research Association, Hartford, Corm. …

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