Market volatility isn’t going away. Here’s how to move client money off the sidelines—without locking it up for 10+ years.
A growing number of clients are sitting in cash—not because they’re comfortable, but because they’re uncertain.
They’re waiting for markets to stabilize. Waiting for inflation to ease. But the wait-and-see mindset doesn’t grow wealth. It simply delays critical decisions.
In today’s environment, short-term fixed indexed annuities (FIAs) offer one of the few solutions that allow clients to move forward without overexposing themselves to market risk. For financial professionals who may have overlooked these products in the past, the market conditions have shifted—and so has the opportunity.
Volatility Isn't Temporary
The Federal Reserve has held interest rates between 4.25% and 4.50% since December 2024. Core inflation is projected to ease to 2.3%, but the path remains uneven.
The S&P 500®’s steep 12% drop following renewed tariff concerns, along with a record-setting 532-point intraday swing on April 9, 2025, reminded both investors and financial professionals that instability remains a central feature of the current market.
Elevated valuations, persistent macroeconomic uncertainty, and declining consumer sentiment have made it harder than ever to build and maintain conviction around long-term plans.
The Cost of Sitting in Cash
While cash feels safe, it comes at a cost. In a 2%+ inflationary environment, holding idle funds erodes purchasing power in real terms.
Short-term FIAs provide an alternative:
- Principal protection from market downturns
- Market-linked interest potential without direct exposure to volatility
- Tax-deferred growth
- Shorter commitment periods that align with current consumer time horizons
These features align well with the mindset of many consumers today: those looking for opportunity, not long-term commitment.
What’s Changed—and Why Timing Matters
Short-term annuities haven’t always been positioned as accumulation vehicles. In the past, it was fair to question whether a shorter term meant sacrificing too much in value. But that environment has changed.
Today’s short-term FIAs offer:
- Stronger participation rates and caps than previous versions
- Greater flexibility across crediting strategies
- Improved value in the form of bonuses and benefits
For clients, that means more attractive upside potential with less long-term commitment.
And for financial professionals, the benefits may go beyond what meets the eye—especially when shorter terms allow you to revisit and readjust sooner as client needs evolve.
Combined, these improvements give financial professionals a timely way to re-engage hesitant clients—without the long surrender periods or exposure risk of other strategies.
And while short-term FIAs offer flexibility in uncertain times, longer-term options may appeal to clients who believe today’s new money rates won’t be around much longer.
Short-term FIAs offer many of the benefits of long-term annuities—without requiring a long-term commitment in an unpredictable environment.
A Strategic Fit for Hesitant Clients
Short-term FIAs are particularly relevant for clients who:
- Are risk-averse but want more than cash can provide
- Are near retirement and seeking stability with modest upside
- Are reallocating assets from maturing instruments like CDs or MYGAs
- Are delaying longer-term financial decisions until the market outlook becomes clearer
Rather than forcing clients into all-or-nothing decisions, short-term FIAs offer many of the benefits of long-term annuities—without requiring a long-term commitment in an unpredictable environment.
Clients want growth—but they also want flexibility and protection. Short-term FIAs offer a way to move forward confidently without committing to a long-term contract or taking on market risk.
When consumer confidence is low and uncertainty is high — few options offer as much practical value right now.