Lifetime income, protection, stability and preserving a client’s standard of living can help retirees better understand when an annuity is appropriate.

Avantis Investors provides four takeaways advisors can apply in client conversations when discussing annuities with clients.

1. Start with income, not account balances

Advisers should begin with the end in mind. The question is not whether retirement is about having a lump sum of money at 65, but whether clients can maintain their standard of living for as long as they live. If the conversation starts with the portfolio, clients are immediately in an investment frame of mind, thinking about risks, returns, trade-offs and account balances. Starting with income instead shifts the focus to the amount retirees need each month to fund their lifestyle.

2. Position annuities as a tool in the toolkit

Annuities are not a one-size-fits-all solution. Advisers still need to assess a client’s willingness and ability to take risk, time horizon, income needs and later-life goals. For some clients, model portfolios, estate planning and tax strategies will be the priority. For others, an annuity can help bridge the gap between Social Security or pension income and the amount needed to maintain their standard of living. The key is ensuring the solution fits the client’s circumstances.

3. Explain the trade-off between upside and protection

Clients naturally want the full upside of investing without the downside risk. Some annuity products can provide participation in market gains while also offering a level of protection against losses. Advisers should clearly explain that while clients may not receive all of the market’s upside, the trade-off is reduced downside risk. Framing annuities as an insurance solution can make this easier to understand. Just as people do not regret paying for home insurance when their house does not burn down, annuities should be viewed as protection rather than judged solely on whether markets performed strongly.

4. Help clients picture their future self

When clients are 60 or 65, they are planning for a version of themselves at 85, 90 or even 95—a future that can be difficult to imagine. A retirement plan that delivers a regular monthly income can be much easier to manage in later life. This is one of the often-overlooked benefits of lifetime income: it provides financial security for the client’s future self and helps reduce concerns about maintaining their standard of living.

Annuities are best understood as filling the gap between guaranteed income and essential living expenses. Advisers who frame annuities around lifetime income, protection, stability and preserving a client’s standard of living can help retirees better understand when an annuity is appropriate—and when it is not.

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Eduardo Repetto

Avantis Investors^®, a global investment offering from American Century Investments®, has surpassed US$150 billion* in assets under management (AUM). The milestone comes six months after crossing US$100 billion in December 2025 and just more than six and a half years after the launch of Avantis’ first strategy in September 2019.

“Each dollar we manage represents the trust that advisers, institutions and consultants have placed with us. We remain focused on listening to our clients and responding with solutions that help them achieve their goals,” said Eduardo Repetto, chief investment officer of Avantis Investors. “From day one, our objective has been to provide great investment strategies and service at an attractive fee. That commitment continues to guide everything we do at Avantis.”

The Avantis investment process is based on an academically supported, market-tested framework that aims to identify securities with higher expected returns based on their current market prices and other company financial information. Its strategies share a common investment approach that combines a philosophy grounded in financial science with expert implementation aimed at increasing expected returns and managing risks.

“It’s both exciting and humbling,” said Phil McInnis, chief investment strategist at Avantis. “It’s a privilege to have so many wonderful clients and be able to serve so many investors. These are fun milestones to celebrate, but we are also big believers in staying focused on our process and trying to get a little bit better every day. So we will keep doing that.”

Avantis’ growth continues to be supported by expansion into new markets and strategic relationships. In November 2025, CIBC Asset Management Inc. and Avantis announced a strategic alliance to launch eight Avantis CIBC ETFs, bringing Avantis strategies to the Canadian market.

Last year, Avantis launched its first three ETFs in Australia.^[1] 

The additions build on Avantis more than 40 investment strategies across the United States, Australia, Switzerland, Germany, Denmark, Finland, Netherlands, Austria, Ireland and the United Kingdom.

Bringing academics and financial advisors together

The Behavioral Divide, an Avantis Investors’ podcast^[2] , is designed to help financial advisors help their clients. Hosted by Professor Hal Hershfield, each episode brings together behavioural decision-making research and practicing advisors to share evidence-based approaches for better conversations and more effective investing behaviour. 

“We developed this podcast to bring academics and advisers together,” said McInnis. “Each month, advisers can tune in for insightful conversations about common financial topics from the perspective of behavioural research and real-world advice. We believe it is important to facilitate these conversations and continue to receive positive feedback from listeners about ways they are implementing what they have learned.”

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Notes:
[1] https://www.avantisinvestors.com/avantis-about-us/news/2025-avantis-investors-enters-australia/
[2] https://www.avantisinvestors.com/avantis-insights/?type=Webcasts&categories=Behavioral+Divide

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