Products May 6, 2013

Lincoln, Primerica Releasing Annuity Products

Lincoln Financial Distributors (LFD) and Primerica Inc. will be releasing more annuity products.
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LFD, the wholesale distribution arm of Lincoln Financial Group, and Primerica, an independent financial services marketing company, will be incorporating additional Lincoln annuity products into Primerica’s retirement lineup. These new products will help provide an expanded range of financial solutions to better prepare their clients for retirement.

This is the second major launch of a Lincoln product since the companies began their partnership in 2011, an alliance that enabled Primerica’s representatives to offer Lincoln’s Fixed Indexed Annuity product as part of its retirement planning portfolio.

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Beginning on July 1, Primerica representatives will also be able to recommend the Lincoln ChoicePlus Assurance variable annuity and a new proprietary fixed indexed annuity, Prime Income Optimizer, as part of their offerings.

“We are excited about expanding our partnership with Lincoln Financial,” said John Addison, chairman of Primerica Distribution and co-CEO. “Today’s announcement is another important step in our efforts to expand our investment and savings product offerings for our clients and help build and grow our sales force, which is already the biggest and best in the financial services industry.”

“Primerica’s decision to expand their array of Lincoln products will better position their representatives to help a broader base of clients protect assets and meet very specific income needs during retirement,” added Will Fuller, president of Lincoln Financial Group Distribution.

Addison and Fuller believe that these solutions will provide clients with a compelling savings option for meeting specific retirement needs, while offering predictability, security and potential guarantees for growth towards future income in any market.

Products May 6, 2013

Morningstar Enhances Managed Accounts Platform

Morningstar Inc. has introduced the next generation of Morningstar Retirement Manager, its advice and managed account service for defined contribution (DC) participants.
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Among the most significant enhancements to Retirement Manager is the addition of Income Secure, which provides individualized, tax-efficient retirement income drawdown advice. A Morningstar research paper, “Alpha, Beta, and Now…Gamma,” shows that a participant’s withdrawal strategy—how much to take from a retirement portfolio each year and from which account (IRA, 401(k), taxable, etc.)—can have the most significant effect on the amount of income an investor has in retirement.

Retirement Manager can evaluate all of a participant’s holdings across both taxable and tax-deferred accounts and provide a specific, individualized drawdown plan that outlines how much he should pull from each account each year, considering taxes and minimum required distributions. “From an individual standpoint, [participants] just want to know how much they can spend in retirement,” James Smith, vice president of client solutions at Morningstar Investment Management, told PLANADVISER.

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Retirees must make many complex decisions every year based on changes that will occur upon leaving the work force: Savings mode will end, and participants will incur different tax rates, for example. “This helps simplify the process for the average person,” said David Blanchett, head of retirement research at Morningstar Investment Management. “Our recommendations will be very different based upon different states.”

Morningstar has also enhanced its investment recommendations to reflect its latest liability-driven investment (LDI) methodology. LDI recognizes that investors in or nearing retirement face different risks than those in the accumulation phase. For example, two investors may have the same stock-bond split in their portfolios, but the investor closer to retirement has greater need for inflation, currency and interest rate protection than someone further from retirement.

Participants who use Retirement Manager will now get investment recommendations that are not only suited to their risk capacity, but also sensitive to the unique risks associated with their life stage.

Another significant enhancement is more holistic retirement planning advice with recommendations about what age to retire. In addition, if a participant is not saving enough and has reached the annual 401(k) savings limit, Retirement Manager will provide participants with asset-allocation and savings recommendations for an outside taxable account.

Additional enhancements to Retirement Manager include:

  •  Portfolio assignment based on patented human capital methodology, which accounts for an investor’s total economic situation—both current wealth and future earnings and savings potential;
  •  Enhancements to fund selection methodology, inflation rate forecasting and treatment of stable value funds; and,
  •  Personalized recommendations for guaranteed income products, both in and out of plan.

The enhancements have already been rolled out to some institutional clients but will fully launch sometime between now and July, Smith said. 

In addition to providing defined contribution managed accounts and advice, Morningstar offers plan sponsor investment lineup selection, 3(21) and 3(38) fiduciary services and custom target-date fund (TDF) design through its registered investment advisers.

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