The Hartford left its variable annuity business behind five years ago -- now, a group of firms are accusing the company of leaving behind its legacy customers.

Ahead of the financial crisis, Radnor, Pa.-based Hartford Financial Services Group pitched its unique Hartford Leaders product to advisors, fund managers and investors as a way to provide customized access to leading investment managers and strategies within a variable annuity.

Now, American Funds, Raymond James Financial, contract holders and others are complaining about a plan quietly submitted to the SEC that would allow Hartford to replace about 60 strategies run by various active managers within the Leaders fund lineup with a slimmed-down selection of 11 funds.

“Our focus isn’t on The Hartford as a company, but on what this would do to the contract owners,” says Michael J. Downer, counsel and director at American Funds. “If contract owners knew what was going on, they would have a problem with this.”

Currently, American Funds, a subsidiary of Los Angeles-based Capital Group, manages about $8 billion in assets from the Hartford Leaders annuities.

At Raymond James, lack of information about the new funds makes it difficult for the firm and its reps to plan for the potential changes.

"They don't have a published track record," says Scott Stolz, Raymond James senior vice president for PCG Investment Products. "We don't have any way to look at these funds to determine whether they're acceptable or not. By Hartford's own admissions, they have no operating histories and comparisons are not possible."

Hartford would run the funds, with five of them subadvised by BlackRock. The funds would differ from the active strategies they replace in being quantitatively driven products more similar to indexes.

According to Matthew Sturdevant, a spokesman for The Hartford, the company is trying to make life easier for its customers.

“These changes streamline and simplify the investment line-ups that are available to customers by removing overlapping and duplicative investment options, and will permit The Hartford to present information to customers in a simpler and more concise way,” Sturdevant said in comments via email.

First « 1 2 3 » Next
To read more stories , click here