Advisers prefer leaving alts in VAs to others

Financial advisers who use Jackson National Life Insurance Co.'s variable annuity appreciate the benefits of adding alternatives, but many would prefer to leave the portfolio creation and management to experts. Some 40% of flows into Jackson's Elite Access variable annuity are going toward the insurer's Guidance Portfolios, one of several prepackaged alternative investment strategies available to clients. Options within that list of portfolios include Maximum Growth, which comprises allocations to natural resources and real estate funds, and Balanced Income. That offering includes investments in global stock, high-yield bonds and emerging-markets debt. There also are options for mostly or all-alternative portfolios. In addition to a solid chunk of new dollars going into prepackaged strategies, many advisers are selecting Institutional Alt 100, said Clifford Jack, Jackson's head of retail. Polls of 2,190 advisers at Jackson's road shows in March showed that though 24% of participants invested less than 5% of clients' assets in alternatives, 95% expected that their use of these investments would rise over the next year. And three-quarters of those polled said that they would be more likely to use alternatives if the investments were offered in a guided strategy. [email protected] Twitter: @darla_mercado