From the October 2006 issue of Boomer Market Advisor • Subscribe!

BMA Readers' Choice Awards 2006

The results are in and the readers have spoken. Boomer Market Advisor undertook its 2006 Readers' Choice Awards survey to call attention to the products advisors are using to address boomer retirement needs. Longevity, rising healthcare costs and unprecedented consumption habits are just some of risks to successful boomer retirement. Each winner was singled out for its ability to effectively deal the unique issues boomers will face. Some of the results were predictable, many were surprising, and all were educational.
- John Sullivan, editor, Boomer Market Advisor Magazine

1. Which company has the best marketing and educational material to assist you in preparing for the IRA rollover wave?

Winner: American Funds - This is the first of three appearances in this year's survey from a company that shows little sign of slowing. Lauded for its stellar returns and superior service, it's little surprise American Funds once again comes out on top.

"The material American Funds provides is consistently good. They're great about getting newsletters out to the advisors, and the educational pieces on their Web site are very robust. It's all connected to the overall service they provide. We're about 90 minutes from the nearest airport so we don't get many wholesalers coming our way; maybe two a year. American Funds not only comes out, but they go so far as to hold quarterly meetings in this area. So they really go above and beyond with everything they do."
- Reader Alex Yearly, financial advisor, Community Pride Financial Advisors, Rehoboth Beach, Del.

Honorable mention: OppenheimerFunds - According to John Davis, vice president of retirement services, "When we develop our material, we think about how the advisors interact with their clients and we put ourselves in their shoes. We anticipate the questions each person will have. We figure that if we help both the client and the advisor with their objectives, ultimately our objective - which is to bring the business to Oppenheimer - will be satisfied."

"Every mutual fund company I've ever written business with sends me material, but I like Oppenheimer's the best. I was at a conference about a year ago and noticed a lot of Oppenheimer pieces, much more than the other company. The great thing is that I'm able to take the information and make it my own. And their Web site is easy to use and also has the information I need. I appreciate the fact that they give me choices about what to use and where to get it."
- Reader Sam Coccia, financial advisor, Synergy Group, Pittsburgh, Penn.

2. Which equity-indexed annuity products do you most recommend?

Winner: Allianz - Despite ongoing Notice 05-50 controversy, equity indexed annuities continue to attract attention - and investments - from a boomer population increasingly concerned about retirement income. In the two years since its release, the Allianz Master Dex Series has created a loyal following among EIA advisors.

"They have a great retirement program that cannot be outlived. It goes on-and-on, more so than any IRA can provide. I don't see innovation from other carriers like this. And they've got a first rate wholesaler that I've known for a while. She's very good at explaining the product and what it can do."
- Reader Jim Tallent, vice president, Buckingham, Buckingham and Reid, Shrewsbury, N.J.

Honorable mention: ING - With $20.3 billion of fixed annuity assets under management (including equity indexed annuities), ING proves its prowess in yet another area of the financial services industry.

"Number one, their expenses are reasonable. I really like what they do with their point-to-point crediting method and their caps are easy to work with. And ING has great education and marketing material. It helps me to clearly explain the product to my clients.
- Reader Darren Josephson, president, Cornerstone Financial Advisors, Idaho Falls, Idaho.

3. Which company currently offers the most cost-effective and comprehensive long term care insurance?

Winner: John Hancock - Few can argue that Manulife's acquisition of John Hancock in 2004 wasn't a smart move. The company is the second-largest provider of individual coverage in the country with more than 912,000 clients. It has $1.1 billion of in-force premium and has paid more than $1 billion in claims.

"John Hancock is very comprehensive in their long term care coverage. It's pretty much all-inclusive. It's a well-known brand name and the claims paying reputation of the company speaks for itself. It's a quality company and a quality product."
- Guy, financial advisor for 28 years, Columbus, Ohio.

Honorable mention: Allianz - Considering that MetLife and Genworth have a significant brand presence in the LTCI space, we were a bit surprised by the Allianz pick. Shows you what editors know -- the insurance and annuity giant's long term care product ranks high with our readers.

"The Allianz product offers flexibility with its waiting periods. It has a great indemnity rider that will grant a specific amount once the triggering event occurs to be used as the policyholder sees fit. For instance, they may have $150 dollars a day apportioned for homecare, but they might not come close to using all of that. Allianz's product will allow that money to be used for other things, like vacuuming and cleaning, and things like that. The client sees this and says, 'Gee, with the indemnity rider, I might not need as much of the standard coverage.' S it also helps to keep the costs low.
- Reader Michael Spencer, president, Senior Asset Management Services, Virginia Beach, Va.

4. Which mutual fund family do you most often recommend to boomer clients?

Winner: American Funds - A quick look at the numbers reveals that advisors are, indeed, recommending American Funds to their clients. It's one of the three largest mutual fund families in the U.S., with more than $700 billion in investments and over 35 million shareholder accounts. And despite its name, the company points to its $200 billion in non-U.S. assets under management.

"Their performance is consistently solid and they have a relatively low cost. It isn't rocket science. With most fund managers barley beating the indexes -- if at all -- why not go with someone that's generating a healthy return? American Funds is just an excellent company to work with.
- Robert Ervolina, financial advisor, Royal Financial Group, Buffalo, N.Y.

Honorable mention: Franklin Templeton - If you want it, they've got it. Solid performance, quality service and a global footprint has made this San Mateo, Calif.-based company a mutual fund mainstay for as long as most can remember.

"I've invested with Franklin Templeton for 20-plus years and I've always found them to be responsive to my needs. They keep my clients happy, they have low fees and they have one of my favorite overseas funds. It also helps that Sir John Templeton is from Tennessee and is a big philanthropist in this area."
- Reader Paul Scott, financial advisor, Raymond James Financial Services, Jackson, Tenn.

5. Which exchange-traded funds are generating the most interest?

Winner: Barclays iShares - Our readers' pick for the second year in a row, the ETF giant continues to gather assets and market share from investors still smarting from recent mutual fund scandal. Their low-cost, transparent nature makes them well suited for boomers that are worried about the effects that taxes and fees will have on their return.

"I recently started using iShares in my personal portfolio and had such a great experience with then that I now recommend them to clients. Their low cost is attractive and the variety of asset classes that they offer is immense when compared with other fund families.
- Reader Rick, financial advisor for 15 years, Minneapolis, Minn.

Honorable mention: State Street Global Advisors/Standard and Poor's Depository Receipts (SPDRs) - State Street certainly knows the ETF business, and our readers once again honor the original. The company claims close to $90 billion in assets under management in 65 ETFs, representing 19 percent of the current market.

"SPDRs are the original, so if you have a client that's at all educated about exchange-traded funds, that's the name they come in with. They've got the brand awareness, and in this space it's like Pepsi or coke. The low fees and great track record are things that clients latch on to."
- Nate Fiser, financial planning manager, Fiser Group, Lenexa, Kan.

6. Which living benefit best addresses the income and longevity issues your clients face?

Winner: American Skandia - American Skandia's living benefit took the top spot with our readers for the second year in a row. The company's Lifetime 5 product guarantees 5 percent annual compounded growth for the first 10 years, a five percent income stream every year for life and flexibility on when withdrawals can be taken.

"The Lifetime 5 product is great for clients that are approaching retirement and have sacred money that they just can't lose. And they get to take advantage of any upside potential in the market. If you look at the way it's structured, both with the accumulation and withdrawal aspects, it's a true 5 percent benefit. And by comparison the fees are low.
- Reader Joel, finacial advisor for 26 years, Scottsdale, Ariz.

Honorable mention: Allianz Enhanced Income Benefit/Prime

7. Which separately managed account platform best suits your clients' needs?

Winner: Curian Capital LLC - Denver-based Curian Capital's low minimums and fractional share technology is a winner with our readers. In the three years since it's launch, the Jackson National Life-owned company is steadily growing, with $2 billion in assets under management in 16,700 separate accounts.

"Curian is a great way to get clients access to a diversified stock account. They've got great service and training, and a great external wholesaling force. Clients like the special attention they receive, much more so than any mutual fund will give them, and their not forced to buy someone else's capital gains."
- Scott Sonnier, president, Financial Management Services of America, Lafayette, La.

Honorable mention (tie): AssetMark Investment Services - Founded in 1996, AssetMark currently administers 40,000 client portfolios with more than $8.5 billion in assets under management. Genworth's $230 million acquisition of the separate account provider raised the company's profile, and our readers are optimistic about the firm's future.

"I've always appreciated the fact that the firm's three founders came all started as financial advisors. They've walked a mile in our moccasins, and as a result they are extremely responsive to the advisor's needs. For example, a few years ago we liked the put-protection Genworth offered on some of its products. We asked them if they could do the same. They immediately talked to Wilshire and got it done. Now, that's responsiveness."
- Bob Enright, principal, Burton/Enright Group, San Francisco, Calif.

Honorable mention (tie): Lockwood Financial Services - The 2003 Lockwood acquisition by The Bank of New York, which then rolled it into it's Pershing division, created a formidable presence in the managed account business.

8. Which international fund offers the most long-term growth potential?

Winner: American Funds EuroPacific Growth Fund - Last year it was the Capital World Growth and Income Fund, this year it's the EuroPacific Growth Fund. Whichever fund comes out on top, it's clear our readers like the company and its international investment strategy.

"We've used the American Funds family for 25 years. Over that time they've always performed well, whether in an up or down market. They've got a great track record and they're what I call a steady-eddy firm. We use their funds for our international diversification, and I've never had to go back and apologize to a client about their performance."
- Reader Bill Hammond, president, Hammond Investments, Atlanta, Ga.

Honorable mention: Templeton Growth Fund - Our readers believe in the Franklin/Templeton's long term potential, and the Templeton Growth Fund continues to lead in the international space. Co-manager Jeffrey Everett appeared on our September cover, and his thoughts on the emerging market sector, as well as where he's finding alpha, are well worth the read (see "Where have all the good deals gone?" Page 50, September issue).

"It's the discipline in the investing heritage that John Templeton has, and it's something he's carried forward over time. The international funds have never been the hottest funds around, but they've always been in the top quartile for as long as I can remember. They don't take knee-jerk reactions to events in the market; they have the Warren Buffet buy-and-hold approach. Their size, philosophy and reputation make me real comfortable with them.
- Lou Borteletto, CEP, RFC, vice-president of marketing, AMZ Financial Group, El Dorado Hills, Calif.

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