Nothing is constant except change and the variable annuity market is putting that rule into practice with a wide range of new products.
New funds and additional riders and services within existing variable annuity products are cropping up almost daily as firms try to meet the changing needs of people attempting to achieve their retirement and savings goals.
“Today, advisors and their clients desire a combination of passive index and active investment management options, along with the added tax benefits afforded by many variable annuities,” says Doug Wolff, president of Security Benefit Life Insurance Company based in Topeka, Kan.
To capture some of that audience, Security Benefit Life Insurance Company is expanding its underlying fund options available within the EliteDesigns suite of investment-oriented variable annuities by adding 19 new investment options.
“Our ultimate goal is to provide a full array of targeted, compelling and innovative investment options that will allow advisors to choose and integrate among both active and passive strategies, all geared for retirement savings,” Wolff adds.
Likewise, Trust Company of America and Jefferson National are integrating Jefferson National’s low-cost, no-load, tax-advantaged investing solution with Trust Company of America’s model-based portfolio management and trading platform. The integration of Jefferson National’s Monument Advisor, a flat-fee investment-only variable annuity with Trust Company of America’s platform is designed to enable more efficient trading.
Some companies are adding options under existing variable annuities. Lincoln Financial Group, based in Radnor, Pa., has created the Earnings Optimizer Death Benefit Rider, available with Lincoln Investor Advantage variable annuity for an additional charge. Distinct from other death benefit riders for investment-only variable annuities, the Earnings Optimizer pays clients’ beneficiaries an enhancement to their contract value to help counter the effect of taxes.
This new rider expands Lincoln’s suite of retirement and legacy planning offerings and underscores its position as a leading provider of innovative retirement solutions that enable advisors to help clients both grow and protect their wealth, Lincoln Financial says.
“Lincoln’s Earnings Optimizer Death Benefit Rider is a great opportunity to maximize the value of our Lincoln Investor Advantage variable annuity for clients,” says John Kennedy, head of retirement solutions distribution. “The combination of Lincoln Investor Advantage and the new death benefit rider provides a comprehensive solution that is an important differentiator in the variable annuity market because it helps clients access a tax-efficient investment fund line up and income stream, while ensuring that beneficiaries are protected with a death benefit and have a strategy to offset potential estate taxes.”
To make its products accessible to more people, Great-West Financial in Greenwood Village, Colo., is making its Great-West Smart Track II – 5 Year Variable Annuity available through the 15,000 advisors at Wells Fargo Advisors LLC. The low-cost variable annuity is designed to provide advisors with a flexible and customizable solution for clients seeking investment growth and retirement income.
“The need for innovative, new retirement income solutions is becoming increasingly evident in the market,” says Bob Shaw, president of individual markets for Great-West Financial. Shaw says the challenge facing annuity providers and advisors is to help more Americans understand that longevity risk is an important consideration in retirement planning.
Companies also are creating new alliances to market variable annuities. Motif Capital in San Mateo, Calif., has been selected by Global Atlantic Financial Group's investment advisor subsidiary, Global Atlantic Investment Advisors in New York City, to sub-advise three new insurance trust mutual funds for variable annuities beginning in the third quarter of the year.
"Motif Capital is a leader in thematic investing. Our ability to offer these funds to our variable annuity clients gives them an attractive new allocation alternative while further differentiating Global Atlantic in the marketplace," says Rob Arena, president of Global Atlantic Retirement and Life.
Another new trend is manifesting itself because of the Department of Labor’s new fiduciary rule for retirement accounts. Jackson National Life Insurance Co. is currently developing its first-ever fee-based variable annuity product.
The DOL rule is expected to make it more cumbersome to sell commission-based variable annuities, which will push companies to develop fee-based products.