Next wave of fee-based FIAs hit the market
In the wake of the DOL Fiduciary Rule, the fee-based fixed indexed annuity movement continues to gain momentum with the introduction of new products this month from Nationwide and Symetra.
On July 24, Bellevue, Wash.-based Symetra Life Insurance Company, a leading fixed annuity provider, introduced two new fixed indexed annuities built for fee-based planning — Symetra Advisory Edge and Symetra Advisory Income Edge.
Back on July 11, Nationwide announced the availability of the Nationwide Summit fixed indexed annuity, the company’s first fee-based FIA, designed expressly to fit the needs of Registered Investment Advisors (RIAs) and fee-based advisors.
Midland National was the first carrier to market with a fee-based FIA, unveiling its MNL Prosper 5 last December.
Now that commission-based FIAs are riskier to sell since the DOL included them in the Best Interest Contract Exemption (BICE), the floodgates to launching new fee-based products appear to be wide open.
Noting a growing market demand for fee-based products, Allianz Life launched its Retirement Foundation ADV Annuity – its first fee-based FIA – on Feb. 7.
Lincoln Financial Group introduced fee-based FIAs in February to provide fee-based advisors with more options for their clients. Designed specifically to fit the needs of RIAs, the Lincoln Core Capital FIA offers principal protection and growth opportunities linked to market performance. Lincoln also added fee-based versions of Lincoln Covered Choice 5 and 7 to its fixed indexed annuity portfolio.
It was reported in May that Voya Financial is developing a fee-based version of its commission-based Voya Journey Index Annuity product that will feature indices from JPMorgan and Citigroup.
What follows are details about this month’s new fee-based FIA product rollouts from Nationwide and Symetra.
Nationwide announces its first fee-based FIA
Nationwide, a leading insurance and financial services organization, on July 11 announced a new fee-based fixed indexed annuity (FIA) option.
Nationwide Summit fixed indexed annuity is the first FIA in their lineup designed to better fit the needs of Registered Investment Advisors (RIAs) and fee-based advisors. Nationwide Summit offers capital preservation without sacrificing growth potential and features the exclusive J.P. Morgan MOZAIC Index (USD).
"Nationwide recognizes the growing market demand for alternatives to help hedge the risk of traditional portfolios managed by RIAs and fee-based advisors," said Mike Morrone, associate vice president of fixed annuity product strategy at Columbus, Ohio-based Nationwide. "In today's low-interest rate environment, the fee-based Summit FIA with the J.P. Morgan MOZAIC Index (USD) offers a powerful accumulation opportunity with no downside market risk."
Summit is currently the only fee-based FIA offering access to the J.P. Morgan MOZAIC Index (USD). Through 18 years of live and back-tested performance, the index would have provided a 5.35% compound annual return with 78% less volatility than the S&P 500® Price Index.(1) Nationwide Summit also includes the S&P 500® Price Index and a fixed account option.
"Nationwide is committed to helping RIAs and financial advisors meet a variety of their clients' needs," said Eric Henderson, Nationwide senior vice president of life insurance and annuities. "We're excited to be on the leading edge of a new market and help shift the risk-return profile of clients' portfolios."
The fee-based Summit is exclusively available through the Annexus network of independent distribution companies.
1 - From 12/31/1998 – 12/31/2016. The J.P. Morgan MozaicSM Index (USD) was established on April 17, 2009. Performance prior to that date is back-tested by applying the index strategy, which was designed with the benefit of hindsight, to historical financial data when all components are available. Back-tested performance is hypothetical and has been provided for informational purposes only. The S&P 500® Price Index results are actual performance for the full period. Past performance is not indicative of nor does it guarantee future performance. The hypothetical data above does not take index fees or transaction costs into account.
• Thoughts about fee-based FIAs? Please visit this thread: Fee-based FIA trend Grows
Next page: Symetra Advisory Edge and Symetra Advisory Income Edge
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