From the October 2009 issue of Boomer Market Advisor • Subscribe!

2009 Readers' Choice Awards

Question No. 1
Which company has the best marketing and educational materials to assist you in calming nervous clients in the current market environment?

American Funds
We're bored with American Funds' success, as is almost everyone else. We say "almost" everyone because their shareholders sure aren't. This is the first of only two appearances in this year's survey (last year, as well as the year before, it was three). Is this a worrisome trend? We seriously doubt it. Readers once again called attention to the clear, easy-to-understand marketing and educational material that clients have little trouble grasping.

"American Funds is very proactive with education for both the advisors they work with and the retail consumer. Surprisingly, I get a lot of snail mail form them rather than e-mails. This is nice because it comes in color and it's something I can share with my clients. It's just a great company."
-- Reader James Michaud, Michaud Financial Services, Fall River, Mass.

Positions change, but the players stay the same. Always seems to be American Funds followed by Franklin/Templeton (or vice-versa). The house that Sir John built continues to roll, even without his leadership. The launch of the Templeton Income Fund in 2005 was meant to address boomer longevity and income issues, and our readers took notice. "When we launched the fund, we knew that people were living longer and that the 50- to 70-year-old segment of the market was the fastest growing segment," portfolio manager Lisa Myers told us at the time. Known for their overseas success, a focus on boomers has only added to the company's momentum.

Question No. 2
From a service and support standpoint, which financial services company makes you feel as if they are a true partner in your business as opposed to trying to sell you a product?

Once again, we're not at all surprised to see Prudential make this year's cut. The company's Retirement Red Zone marketing and education campaign, in particular, gets kudos for explaining the relationship between emotions and investment decision-making. The concept of behavioral economics can get complicated, and it's a source of constant frustration for advisors who are seeking to ensure a successful environment for their clients. If you're looking for assistance with your "stay the course" message, Prudential can help. The Retirement Red Zone micro-site is a perennial mention with readers, and can be found at

"The company's Retirement Red Zone education campaign is something I use with my clients to explain the steps needed to prepare for retirement. It shows them what's just over the horizon, and that's a good point at which to begin the necessary retirment discussions."
-- Anonymous

Principal Financial
With Wall Street mainstays dropping like flies, Principal has benefited from its 130 years in business, to the tune of $304 billion in assets under management. Granted, AIG taught us bigger isn't necessarily better ... but c'mon. The company manages assets for 11 of the top 25 largest pension funds in the United States and is the 38th largest institutional asset manager in the world. Their "Plan Ahead. Get Ahead." retirement educational material was singled out for being particularly well structured for use with clients.

Question No. 3
Which company currently offers the most cost-effective and comprehensive long term care insurance?

John Hancock
Every time they appear, we can't help but give props to Manulife for its acquisition of John Hancock in 2004, something that continues to pay dividends. Along with Genworth, John Hancock was one of the first companies to enter the LTCI business, starting out in 1987. The company has paid more than $2 billion in claims and touts more than a million long term care policyholders--a number, as we've previously mentioned, that is sure to exponentially rise as baby boomers age.

"John Hancock has great long term care insurance products. They were the last to have a rate increase (although they did have one) on new policies. This tells me their underwriting is solid and they feel comfortable with their reserves. The products are priced well and right for many of my clients."
-- Anonymous

The company's simple claims-paying process once again made it a hit, as did its longevity in the business. The sudden exit a few years back of many of its competitors certainly helped. But it was Genworth's pricing of the product (a constant objection voiced by advisors that argue in favor of self-funding) that was heard in the results once again this year. The company's dedication to LTCI education (as well as an explanation of the odds of actually using the product) is helping advisors convince their baby boomer clients of its rapidly increasing need.

Question No. 4
Which mutual fund family is effectively incorporating the needs of boomer retirees and pre-retirees into its product design?

American Funds
As we said ... the players stay the same. But again, who wouldn't want to be in the enviable position of boring people with success? Forget a focus on the hot new thing; not a whole lot of hot money (thankfully) running in and out. American Funds' methodology continues to be staid and predictable, as are their returns. For boomers who want steady, solid growth, American Funds is it.

"Their products are built for baby boomers and they really make an emotional connection within their marketing material, whether it's an American flag or an oak tree; things baby boomers identify with. I've been doing this for 18 years, and early on I got sucked into products that were the hot, new thing that ended up with unpleasant surprises. There are no surprises with American Funds. They're plain vanilla, and they work."
-- Reader Mark Lamkin, president, Lamkin Wealth Management, Louisville, Ky.

Franklin Templeton
Franklin Resources rocked the investment world in 1992 when it acquired Templeton Galbraith & Hansberger, and the landscape hasn't looked the same since. We marked the passing of Sir John earlier last year. But few know the history of the Franklin side, a company founded in 1947 and named for the founding father by Rupert H. Johnson, Sr. Johnson's heirs continue to run the firm, which may be the reason for its solid stewardship. Considering they've placed well in a number of categories in our annual survey over the years, we expect continued success from the San Mateo-based company.

Question No. 5
Which exchange-traded funds are generating the most interest?

Barclays iSHARES
The combined assets of the nation's mutual funds increased by $398.6 billion, or 4 percent, to $10.4 trillion in the latest ICI compilation. The combined assets of the nation's exchange-traded funds (ETFs) were $639.9 billion for the same period. So, even with the worst global financial meltdown in human history, ETFs didn't make a whole lot of headway against their mutual fund counterpart. And maybe they shouldn't, since there's plenty of room for both in the retirement portfolio. Regardless, Barclays, the big daddy in the space, continues to roll. With products that track just about everything -- and we do mean anything -- $2 trillion in assets and clients in 54 countries, it's easy to see why.

"We use iShares because of their diversification and the types of ETFs that they offer. They seem to be very efficient and service oriented. They're big in the ETF space, but they aren't arrogant about it. They're just great to work with."
-- Reader Ray Miller, president, Certified Planners Inc., San Ramon, Calif.

Powershares comes on strong, and this is the second consecutive showing for the company in our Readers' Choice Awards. Powershares claims the inception of the first actively traded exchange-traded fund meant to compete more directly with actively traded mutual funds. But even prior to the company's development and release of the product, the company was a hit with our readers. The potential of actively traded ETFs is still under debate, but once again we refer you to the convincing case made by Bruce Bond, Powershares president and CEO, in his piece entitled, "Why the world should embrace active ETFs." It can be found in the June 2008 issue of Boomer Market Advisor or online at


It's nice to see elder-statesman John Bogle still doing so well, and still voicing his opinion to anyone who'll listen. At the Morningstar advisor conference earlier this year, he had no qualms about taking the company he founded to task for what he saw as inferior (and irresponsible) products offered to the public. But our readers disagree, and Vanguard ETFs once again placed well in our annual poll.

Question No. 6
Which living benefit best addresses the income and longevity issues your clients face?

Prudential Annuities
Much like American Funds, we're beginning to get bored with Prudential Annuities' success. Here they are again, dominating our living benefit category. In a field crowded with living benefits, second generation living benefits, hybrids, hybrids of hybrids and Lord knows what else, Prudential's products clearly stand out. It might have been the LTCI/nursing home reference in the latest product design that did the trick. If history is any indication, we'll just go ahead and reserve some space for them again next year.

"They're just a very strong company; they've been around and The Rock imagery really resonates with everything that's going on. They're very well known and very well respected. And they're a very diversified company that isn't overextended in one particular area. Not too many other companies can say that at the moment."
-- Reader Stewart Weitz, CLU, ChFC, LUTCF, Creative Benefit Plans, Dresher, Penn.

Jackson's a la carte living benefits menu continues to be a hit with readers. According to Morningstar Annuity Research Center, the East Lansing-based company had the fastest growing variable annuity assets in the industry from 2000 to 2008. With all that's happened in the space, it might not be something to necessarily brag about, unless you're on solid financial footing. With $75 billion in total assets, Jackson appears to be just that. Be sure to see Greg Salisbury, the company's executive vice-president, as he discusses the continuing issue of retirement income at our retirement income symposium, "The New Retirement Mentality" in Chicago, October 19th and 20th.

Question No. 7
Which separately managed account platform best suits your clients' needs?

Third time's a charm for the Denver-based separately managed account provider. We (somewhat condescendingly) referred to Curian as an upstart in the SMA space in each of the company's previous two wins. No longer, and its Custom Style Portfolios once again resonated with readers. We'll see if the company's recently released Custom Wealth Platform, a unified managed household solution (gotta love these industry terms) makes any headway for next year's survey.

"Curian's a totally Web-based operation, so it's nice not having to deal with the paperwork. I love the technology. Their third party money management is top notch. Their lower minimums give smaller accounts access to a level of professional money management that they would otherwise not have."
-- Joseph A. Grutto, executive consultant, JAG Consulting Company, Satellite Beach, Fla.

Genworth Financial
Like Manulife's acquisition of John Hancock, we continue to give Genworth Financial props for its acquisition of Assetmark. The integration of the SMA into Genworth's suite of offerings had some nervous but so far, according to readers, it's worked well. The educational initiatives undertaken by Genworth to educate advisors in the SMA space received special kudos. All-in-all a solid platform meeting the needs of advisors--and more importantly, their clients.

Question No. 8
What technology platform is the most effective at helping you increase revenue and decrease costs?

Sage Software's ACT!
After taking a year off, ACT! takes the top technology spot. Truth be told, we're a little surprised readers didn't choose something a bit more specific to the financial services industry, but it is what it is. And let's face it, the inherent flexibility in the ACT! product is the main reason for its popularity. Boomers demand customization in the financial products they buy, as do boomer advisors in the technology they adapt. ACT!'s ability to customize to almost any industry fuels its stellar success, and our readers have made it the advisor CRM of record in this year's survey.

"I have ACT! for Financial Professionals. It's more than just managing client contacts. I actually have a complete client profile at my fingertips, which is critical in client meetings. I can customize the system to my needs; for instance, I have an estate planning tab, and an LTCI tab, and an investment tab, etc. It's also great to have the mail-merge function with my own database."
-- Anonymous

Net Exchange Pro
Whether it's their separately managed account platforms or their cutting-edge technology, Pershing is another perennial favorite with readers. Their dedication to technology in order to cut costs and increase efficiency among the advisors they work with (directly or indirectly) stood out once again this year. NetExchange Pro offers an online brokerage platform to access account information, place trades, and get quotes, news, and research. More than 85,000 financial professionals are using the product to grow their businesses.

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