Securities America's new hands-on Web-cast coaching program is designed to help its 1,900 independent advisors choose which clients are best suited for its NextPhase time-segmented retirement income-distribution system.
The $499 eight-week series is being rolled out July 8 after being introduced at the broker-dealer's annual conference earlier this month in Southern California. (Securities America is part of Ameriprise Financial.)
Managed Opportunities NextPhase divides assets into time segments, each typically five years long and each calling for a different type of investment, says Zachary S. Parker, director of annuities and insurance.
"The first segments will be for fixed-income," Parker said. "They can be guaranteed to provide a certain amount of income.
"Then the advisor has the choice of how to invest the next segment," Parker explains. "The majority choose fixed options. For the third segment, we recommend a balanced or growth-and-income model. From there, you can get more aggressive, the most aggressive segment being all equities."
Retirement income-distribution planning is a major financial advisor opportunity, especially in view of baby boomers' widespread fear of outliving their assets.
"Some advisors don't do a whole lot of planning in that area, because they're working with clients mostly in the accumulation phase, or else the retirement-planning solutions they're using aren't optimal. We can help in both" scenarios," says Parker.
In the new coaching program, no specific products are promoted or required; but depending on the time segment, certain types may fit better than others.
"Let's say for Segment 2, you'd want to use a five-year deferred annuity. We talk about what goes into these products and where to go to shop for the ones with the best rates. But ultimately the choice remains with the advisor," says Parker, who covers products, among other areas, in the training series.
He has been responsible for the firm's time-segmented philosophy and strategy since inception of its Income for Life Model, developed for SA by Wealth2K in 2005. It features an interactive client Web site, "Retirement Time." The NextPhase platform, unveiled in 2009 and built by EnvestNet, goes beyond Income for Life with its advantages of management and tracking.
It also allows advisors to add Social Security benefits and pension income to plans.
Another retirement income-distribution tack that can be taken in tandem with NextPhase is investing in a separate guaranteed product -- for example, a single-premium immediate annuity or a variable annuity with an income guarantee -- to provide an income stream in addition to those generated by the time-segmented strategy.
"Picture two railroad tracks -- one designed to hold the train up; that's your time-segmented path; the other is your guaranteed-income path. Two separate strategies, but both there to help the train get down the track," Parker explains.
A special questionnaire SA has developed identifies clients with such need. Typically those receiving Social Security benefits or large pension proceeds -- that is, clients who already have a significant stream of guaranteed income -- are not identified as such clients.
In the coaching, Parker, who received a Financial Frontiers Award from the Financial Planning Association in 2008 after writing a white paper on income-harvesting, will conduct sessions on advanced planning approaches focused on real-life situations.