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.

At the heart of the complaints, filed with the SEC in January, is the contention that Hartford is not making a like-for-like change to its funds.

In fact, the change may leave Hartford’s legacy variable annuity customers worse off, says Steve Joyce, senior vice president of The Capital Group and a former Hartford executive.

“They’re replacing low-expense, fundamentally active funds for high-expense, quantitatively managed funds,” Joyce says. “To charge active fundamental management fees for quantitative funds is just wrong … and consumers want choices more than they want simplification -- the average of the top 10 variable annuities today has 102 fund choices.”

American Funds says that if Hartford is successful, the average Leaders variable annuity contract will have a total of 20 investment options to choose from.

American Funds and Raymond James support adding the new, lower-priced investment options, but not reducing the selection of funds available to clients. After the new Hartford funds have an ample track record for comparison, a decision could be made whether to trim down the investing options.

At Raymond James, Stolz doubts whether Hartford could make a like-for-like replacement while reducing the number of funds.

"They're taking 17 different sub accounts that could be growth or growth-and-income oriented and collapsing them into one growth-and-income subaccount," Stolz says. "We find it difficult to believe that 17 different funds, all of which have some different objectives, could be made equivalent to one fund."

Sturdevant maintained that the Hartford still offers a broad selection across its variable annuity business and would continue to do so after the proposed changes: over 200 funds from 31 investment managers representing 33 different investment styles.

“Annuity customers will continue to have access to the same asset classes and a comparable variety of funds that include a spectrum of risk and return profiles,” said Sturdevant.

The Hartford Leaders variable annuity products used access to “leading” managers as part of its value proposition, says Downer.

Since Hartford stopped offering new contracts in 2012, the company has engaged in continuous efforts to get the $42 billion it holds in variable annuity contracts off of its books.

“They’re trying to make this block of business more attractive to a buyer, and less valuable to a contract owner,” Downer said.

According to Joyce, Hartford offered guarantees on the Leaders annuities that made the business a sandbag on its other operations. Since abandoning the business, it has attempted to offer contract holders inducements to surrender their variable annuities, with some success.

Downer and Joyce claim that Hartford's current proposal, made public in an SEC filing, is being kept quiet by the company.

While Raymond James and Hartford have communicated about the matter on the home office level, Stolz says it is difficult to get information to advisors and consumers.

"As soon as the SEC approves this, we'll have to reach out to our advisors," Stolz says. "The dilemma, though, is that if we're asked by our advisors or our clients about what to do with this, given the fact that these funds have no track record, we can't tell them what to do."

Downer claims that Hartford is putting its shareholders ahead of its contract holders, and the conflict between serving clients and shareholders is tamping down opposition to the move.

“It’s difficult to create controversy if you’re a public company; we’re not, we had the opportunity here to fight for principle,” Downer says. “There’s no question that we have some self-interest here; $8 billion is a lot of money, but our gross 2016 inflows were about $185 billion. We’re not motivated to do this out of a desperation to preserve assets.”