“As the marketplace has evolved to begin having brokerage products and moving toward advisory products, annuities have trailed the industry in making that transition to advisory annuities,” Burrow said. “So today, we now have brokerage programs and advisory programs.”
The other change that took place with annuities had to do with the process. The data that is needed to manage the contracts has ported over from the insurance companies to their most commonly-used platforms, according to Burrow. Finally, RIAs do not have the licenses to offer these solutions. However, through the use of third-party platforms they no longer need them. These platforms hold the licenses that the advisors work through, Burrow said.
With these changes, Jackson pushed to expand its distribution network into the RIA market and now has nine partners it works with and is constantly looking for new ones. Burrow said if Jackson finds a firm that offers complementary distribution, it will pursue that relationship. The firm does not have a specific target number of partners it is seeking.
For Halo, the relationship with Jackson has been successful as the firm has expanded its own business model, which originally started just offering structured notes, according to Moses. Given the similarities between notes and annuities, Moses said that Halo decided to expand into annuities.
“Management was looking into the industry and where they could expand and annuities and insurance made the most sense because it matches what they are doing even though it is different,” Moses said.
It has also been offering its platform to a number of different companies and has about 10 current working relationships. However, it has put any future deals on hold as it conducts a thorough review of the products it is currently offering. Moses said firm officials will evaluate them to see if they all continue to make sense on the platform.
There are certain products that it wants to offer to advisors. The first is term life insurance, which Halo will make available to those advisors using its platform on Jan. 1. Another longer-term product will be permanent life insurance, which Moses described as the future of the outsource insurance desk. However, those talks are only internal at this time.
The other main project that Halo has been developing over the past couple of months is its Change of Broker-Dealer business. As advisors transition from commission-based to fee-based business, these advisors wrote annuity contracts under a commission-based system.
Under the system they are transitioning to, they can no longer hold those assets. Halo is looking to provide a broker-dealer that can help these advisors not only transition to the new advisory business but also a way to continue to access the commissionable contracts, according to Moses.
“We can help the advisors to move away from their broker-dealer, which may restrict them from using advisory products and creating a very simple and easy platform to place the business on so they can now actively get into more of the advisory business but not lose contact with the old commissionable business that they had written in the past,” Moses said.
The firm currently has three companies that it is working on this project with several more in the pipeline.