By: James Caparosa, Director of Index Sales, Nasdaq Index Solutions
Earlier this year Nasdaq Global Indexes partnered with Wealth Management IQ to survey over 400 financial advisors to gauge prioritization of income in their portfolios and understand the types of income-oriented solutions they are using in client portfolios.
The 2025 survey was follow-on to a 2023 survey and asked many of the same questions. The shifts in answers over the two-year period are notable, revealing several interesting trends and highlighting opportunities for indexed annuity products in the income space.
The Rise of Insurance Products in Retirement Portfolios
Explore all the key insights from the survey here.
When the survey drilled in deep on the types of vehicles used to build income allocations, 55% of respondents stated that they used annuities contracts, an 8% increase from the 2023 survey.
The survey results reinforce a wider trend of insurance product utilization by financial advisors with clients approaching retirement. With the monthly payments and general stability, insurance products can deliver the income needed by retirees.
Why Registered Index-Linked Annuities (RILAs) Are Gaining Momentum
Registered Index-Linked Annuities (RILA) are one of the leaders of this trend. According to LIMRA, in the first half of 2025 RILA sales jumped to $37 billion, a 20% year over year increase. Overall, sales of annuities in the US reached $223 billion in the first half of the year, a 3% year over year increase.
Mitigating Inflation and Interest Rate Risk with Indexed Solutions
A key factor underpinning the utility of insurance products is their ability to mitigate the risks faced by client portfolios in today’s market.
The survey also asked respondents to weigh in on what they believe are the biggest risks to income portfolios over the following twelve months. Inflation (44%) and interest rate changes (33%) were each among viewed as top risks to income portfolios.
Explore all the key insights from the survey here.
For classic fixed income instruments like bonds, inflation and interest rate changes will have a significant negative impact on yields, driving down their effectiveness in creating income for clients. Financial advisors need new solutions that can generate income for clients across various stages of an economic cycle.
Insurance index-linked products help to mitigate interest rate and inflation risk by tying the cash value growth to the performance of a market index, such as the Nasdaq-100® rather than fixed interest rates. It is this connection that allows policyholders to benefit from potential market gains during periods of rising interest rates or inflations, while also often including downside protection or principal protection. Due to the market participation aspect these products provide a hedge against low yields that can accompany traditional fixed-rate products in a volatile or inflationary environment.
Nasdaq’s Role in Innovating Annuity Products
While demand for income products continues to grow, market volatility and a low-interest rate environment have reduced the efficacy of traditional fixed-income annuities. Financial advisors need a range of products that can both meet market opportunities and mitigate risks.
Nasdaq had helped bridge this gap through a growing suite of fixed-indexed, variable, and structured annuity products, all linked to trusted Nasdaq Indexes.
Nasdaq Volatility Control Suite
Developed in partnership with Salt Financial, the Nasdaq Volatility Control Indexes allow investors to manage market volatility while also tapping into the growth-oriented and innovative companies listed on the Nasdaq Stock Market®. With annualized volatility targets ranging from 5% to 15%, these indexes helping balance investment goals with preferred risk tolerance.
Nasdaq MarketFlex
Nasdaq MarketFlex is a versatile index solution designed specifically for insurance carriers seeking to deliver innovative fixed indexed annuity products. The index provides exposure to the Nasdaq-100® while maintaining a risk profile comparable to the Nasdaq US 500 Large Cap™ Index. The result is a blend of growth potential and downside protection that neatly aligns with today's evolving consumer preferences.
Educating Advisors and Clients on Index-Linked Strategies
One of the biggest obstacles in the way of further adoption of index-linked insurance products is the lack of familiarity that clients and advisors have with them. Nasdaq Global Indexes is working constantly to close that gap with our insurance issuer partners, wholesalers, and financial advisors.
We recently sat down with several of those partners during annuity awareness month to discuss the state of the insurance market and how index-linked strategies are creating opportunities for clients.
Watch all the conversations here.
