RetireUp drags and drops annuities into retirement income planning

Company-specific products can be compared for clients' best interests

Feb 18, 2016 @ 1:38 pm

By Alessandra Malito

RetireUp, a retirement income planning software provider, partnered with two insurance companies this week to allow advisers to drag and drop the insurers' fixed-indexed annuity products into clients' retirement plans for a quick analysis of what works and what doesn't.

With this tool, advisers will be able to instantly see and illustrate how fixed-indexed annuities from Great American Insurance Group and Allianz Life Insurance Co. would affect a client's retirement income plan and compare them to other retirement investment products and strategies. Advisers can move around within the system to see what would happen if some money from current portfolios was moved to an annuity.

"We didn't want to be a sales tool for annuities," said Dan Santner, chief executive and co-founder of RetireUp. "We show you immediately in front of your face what would happen. A lot of plans come together, some fall apart."

Allianz was the leader in indexed annuity sales at the end of 2014 with 27.71% of the market share, according to InvestmentNews. Great American was fourth, at 6.43%. Fixed-indexed annuity products on RetireUp's platform include Great American Life's American Legend III with the IncomeSecure rider, and Allianz 222 and Allianz Core Income 7.

Mr. Santner said more annuity products will follow.

Brad Johnson, vice president of adviser development at Advisors Excel, an insurance marketing organization, noted that as pensions go away, advisers can use annuities to provide clients more flexibility and less risk of not having retirement income.

"An annuity is simply a lever — you can dial up or down the risk inside of your portfolio," Mr. Johnson said.

That doesn't necessarily mean annuities always fit with a client's retirement plan, said Phil Lubinski, a founding partner of First Financial Strategies and the training curriculum developer for WealthConductor, a retirement income planning tool from 3D Asset Management. WealthConductor does not illustrate specific companies' products, but can be used to assess the advantages or disadvantages of using annuities as part of an income floor.

"The first step is to determine if it makes sense in the plan to use an indexed annuity," he said.

Mr. Lubinski said advisers may not want to use an indexed annuity for long-term growth for clients who don't need that money for 15 to 25 years because the cost of the guarantees in most annuities can be high.

But advisers are always looking for more retirement income planning technology tools to help with this type of analysis, he said, especially given the regulatory environment.

Analyzing annuities directly in a plan can open advisers' eyes to the recommendations they may already be making, showing potentially better options to offer their clients, Mr. Santner said. This could come in handy especially if the Department of Labor finalizes its fiduciary rule, which would require advisers to act in their clients' best interest when managing retirement accounts.

"We believe you will see advisers are going to be under more scrutiny to provide rationale for recommendations they are providing," Mr. Santner said.

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