During the last several years, Kantner's group has made use of variable annuities for their guaranteed withdrawal benefits. However, "because the variable annuity companies had significantly increased fees for these types of guarantees, we needed a method to reduce the internal fees and provide clients with more investment flexibility at a lower cost," he says. "The NextPhase program allowed us to segment clients' assets for their future income needs, which also included cost-of-living adjustments."

Securities America's ROI Program
The Reliability of Income (ROI) profile, incorporating NextPhase, was developed by Securities America to access clients' need for guaranteed income and at the same time determine their risk tolerance, or their ability to withstand volatility.

It enables clients to feel more secure in the early years and confident they'll benefit from the longer-term strategies employed for later time segments, according to Zachary Parker, director of insurance and annuities at Securities America. The process shifts clients' attention from "how much" to "how long," he says.

The program grew out of a 2007 Securities America white paper entitled "Capturing the Income Distribution Opportunity," which compared three different time distribution strategies over 25-year time periods dating back to 1927. It concluded that advisors should consider using a combination of lifetime guaranteed income products and time-segmented solutions.

In the early phase of the program, clients are given a 17-question quiz to assess their emotional and financial side. Nine questions relate to the clients' need for guaranteed income, the rest to their ability to withstand risk. A scoring key helps advisors assess how much risk the client can emotionally tolerate, and how much guaranteed income the client needs.

"One of the reasons behind ROI was because we identified that advisors would sit down in front of a client and present solutions, and then the client would make their decision based on emotion," explains Parker. "The ROI profile helps advisors better identify both financial needs and emotional needs of the client and implement the ideal product mix.

"The way we explain that to advisors is tell them to picture a set of railroad tracks. The train is essentially the client's retired income stream, and you're using two strategies. One track is our guaranteed income strategy, and the other is our time-segmented strategy, NextPhase. Both of those are used to help the client get to their retirement objective."

Parker has helped advisors implement these plans for several years. "The majority of the plans we create using this particular philosophy project that the principal balance will remain intact over the duration of the plan, and in some cases can even grow. [In that case], the compensation could be greater than if the advisor implemented a systematic withdrawal plan.

"Our tool is top of the line," according to Parker, "but we pride ourselves on providing the support required to help advisors implement the strategy in their business and in growing their business. To have a successful program, you need to deliver both a great solution and great service."

TD Ameritrade's Approach
TD Ameritrade Institutional uses a similar time-segmented approach in counseling advisors to meet the retirement income needs of clients. "We ask them to look at certain events, the birth dates of their clients, for example, and use those dates to position themselves as the retirement income specialist for that client," says George Tamer, director, institutional sales.