Bob MacDonald on the Unprecedented Opportunity in the Annuity Industry
Bob MacDonald has had a storied career as a leading entrepreneur and executive in the financial services industry.
Some of Bob’s roles include: president and CEO of ITT Life; founder, chairman and CEO of the highly successful LifeUSA, and; CEO of Allianz Life of North America. Bob is also a noted business author with several best-selling management books to his credit.
As a widely acknowledged thought leader and product innovator in the financial services industry, Bob is able and willing to share a wealth of experience and insights.
Annuity Industry Pioneer Jerry Golden at Work on his Latest Venture
Jerry Golden--often referred to as the father of variable life insurance and variable annuities--has had a distinguished career as an innovator and entrepreneur in both the insurance and personal retirement businesses.
Jerry most recently spent four years as president of the Income Management Strategies Division at MassMutual after selling his business to the company in June, 2005.
Since leaving MassMutual in May, 2009, Jerry has been actively developing a new venture which will deliver yet another set of innovations to the personal retirement marketplace.
Francois Gadenne and the Formation of the Retirement Income Industry
Francois Gadenne is the Chairman and Executive Director of the Retirement Income Industry Association (RIIA).
Formed in 2006, RIIA is bringing together the leading minds and resources in the relatively young retirement income industry. RIIA members include leading academics, banks, insurers, fund companies, financial advisors, brokerage houses, researchers, technology companies, marketing firms, consulting firms and media.
First Lose No Money
Is there a financial equivalent to the maxim “first do no harm?”
What if one of the guiding principles of medicine was applied to the world of financial advice?
What would the financial services landscape look like if product manufacturers and advisors were required to play by rules similar to those that exist for physicians?
First, my guess is that the financial corollary to the application of primum non nocere (first do no harm) would be:
Longevity Risk and Portfolio Protection Without a Variable Annuity
Two of the most daunting risks faced by the majority of retirees are:
- The risk of outliving one’s money (longevity risk).
- The risk of experiencing a bear market near or at the beginning of retirement when one’s portfolio is most vulnerable (sequence of returns risk).
Various types of annuities—particularly longevity annuities—can effectively address the longevity risk issue. Guaranteed living benefit features that come with variable annuities can mitigate both sequence of returns and longevity risk.
Ten Questions to Ask When a Financial Advisor Says: "You Know I'm Not a Big Fan of Annuities"
Many financial advisors seem conditioned to wear annuity criticism as a sort of badge of honor.
As the past couple of years have so painfully revealed, however, this conventional wisdom rests on shaky ground.
What types of questions might a client present to an advisor who appears to have a reflexive inclination to dismiss most or all forms of annuities? Consider the following:
1. How are my assets hedged against longevity risk? In other words, how am I protected from outliving my money?
The Costs of Investing and How the Fund Management Industry Comes Out on Top
A common refrain among the financial media and the asset accumulation community is that annuities represent a poor option because of the high fees and expenses—much of which is presumably directed towards compensation of intermediaries—that are incurred by the customer.
The vigilance and concern are heartwarming, but how about directing the same critical eye towards the products that serve as the presumed foundation for wealth accumulation?
Federal Government Requests Advice on Use of Annuities in Retirement Plans
A handfull of federal agencies have posted a request in the Federal Register.
The agencies are requesting information and advice on the use of annuities and other lifetime income products in employer sponsored retirement plans such as 401ks. Comments are due May 3.
The interest stems from the prevalence of defined contribution retirement plans such as 401ks and the fact that most participants in these retirement plans distribute their savings in the form of a lump sum rather than a stream of income.
Longevity Market Leaps Ahead with Launch of Life and Longevity Markets Association
A group of banks and insurance companies recently formed a London-based trade group called the Life and Longevity Markets Association (LLMA).
The LLMA aims to develop a liquid market for longevity risk that taps into broader capital markets rather than just the balance sheets of certain insurers and reinsurers.
A core focus will be on longevity swaps and making the longevity swap transaction process more efficient.
Longevity swaps serve as a risk transfer alternative to pension buyouts.
Variable Annuity Related FINRA Arbitration Cases Triple in 2009
The Financial Industry Regulatory Authority ("FINRA") has reported that the number of arbitration cases related to the sale of variable annuity products increased from 47 cases in 2008 to 123 cases in 2009.
Overall, the number of arbitration cases surged 43% to 7,137.
This increase in investor grievances is not surprising given what a difficult year 2009 was for many.
Investment News reports that many of the variable annuity cases involve "products with risky subaccounts and clients over age 60 with 10% - 25% of their net worth in the annuity.
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