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Next wave of fee-based FIAs hit the market

Brian Anderson

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

Symetra introduces pair of fee-based FIAs

Symetra Life Insurance Company, a leading fixed annuity provider, has introduced two new fixed indexed annuities built for fee-based planning — Symetra Advisory Edge and Symetra Advisory Income Edge.

Both annuities provide retirement customers with asset protection and interest crediting opportunities through multiple index options, including the JPMorgan ETF Efficiente® 5 Index.

“The addition of Advisory Edge and Advisory Income Edge to Symetra’s broad suite of fixed indexed annuity products offers advisors greater choice and aligns with our commitment to providing transparent, flexible options that add value and fit the needs of today’s retirement marketplace,” said Kevin Rabin, vice president of Retirement Products. “Symetra’s commitment to adapting our products to meet our partners’ evolving needs is one of our core strengths. Expanding our lineup of commissionable FIAs to include these new fee-based products allows advisors and their clients to decide which planning model best suits their retirement objectives.”

Advisory Edge and Advisory Income Edge offer:

• Index Choices — Credited interest based on the performance of the ETF Efficiente Index and/or S&P 500® Index, up to a cap.

• Protection of a Fixed Annuity — Purchase payments and previously credited interest are protected from market losses.

In addition:

• Lifetime Income with the Potential to Grow — Advisory Income Edge’s guaranteed lifetime withdrawal benefit (GLWB) provides income that can last a lifetime, with upside potential both before and after payments begin.

• Thoughts about fee-based FIAs? Please visit this thread: Fee-based FIA trend Grows

About Symetra: Symetra Life Insurance Company is a subsidiary of Symetra Financial Corporation, a diversified financial services company based in Bellevue, Wash. In business since 1957, Symetra provides employee benefits, annuities and life insurance through a national network of benefit consultants, financial institutions, and independent agents and advisors. For more information, visit www.symetra.com.

Symetra Advisory Income Edge and Advisory Edge are individual single-premium fixed indexed deferred annuities with a market value adjustment feature. Annuities are issued by Symetra Life Insurance Company, 777 108th Avenue NE, Suite 1200, Bellevue, WA 98004. Contract form number is ICC14_RC1in most states. The Guaranteed Lifetime Withdrawal Benefit Rider form number is ICC15_RE1 in most states. Product and rider are not available in all U.S. states or any U.S. territory. Terms and conditions may vary.

Market value adjustment does not apply in California.



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