Morningstar Announces New Variable Annuity Comparison Tool

Users have capability compare VA contracts side-by-side, generate ‘client-friendly, FINRA-reviewed presentations and reports’

Morningstar announced Monday it has launched Morningstar Annuity Intelligence, a web-based product for evaluating variable annuities. Designed for financial professionals, including broker/dealers, financial advisors, compliance officers and insurance carrier representatives, the database provides real-time data on more than 100,000 annuity subaccounts and 1,950 annuity contracts, according to the Chicago-based company.

Morningstar logoThe new offering combines Morningstar Annuity Analyzer and the Annuity Intelligence Report to create “an all-in-one source for annuity data and information,” according to a company statement. Users now have the capability to search for variable annuity contracts, compare them side-by-side, and then generate “client-friendly, FINRA-reviewed presentations and reports.”

“When it comes to purchasing an annuity, every investor has specific, personalized needs, but it can be difficult to compare annuities in a meaningful way,” Kevin Loffredi, vice president of insurance solutions for Morningstar, said in a statement. “By combining our two most popular annuity tools into one solution, we’ve made it easier for financial professionals to make apples-to-apples comparisons between different annuity products and help find the most appropriate annuity for each client.”

Morningstar Annuity Intelligence includes a new lifetime income calculator, which allows an advisor to see the amount of guaranteed income an annuity benefit will provide for a client based on different criteria. It includes “plain English” descriptions of complex provisions in annuity riders, annuity fee data, contract titling information, and historical contract data dating back to the 1960s. In addition, it helps compliance officers support their suitability and review process for an annuity purchase, and it enables suitability forms to be automatically populated with contract, benefit and fee information to streamline the transaction process.

The company adds that, as part of Annuity Intelligence, Morningstar offers two add-on capabilities, VA Expense Analyzer and VA Hypothetical Illustrator, which are designed to help provide transparency to advisors and their clients. VA Expense Analyzer helps streamline the compliance and sales disclosure process by conducting suitability and cost analyses to help make sure a recommended annuity is appropriate for a client. It also calculates how long it would take for a client to recover a surrender charge in the event he or she exchanges an annuity contract. VA Hypothetical Illustrator helps support client proposals by analyzing variable annuity performance as a standalone investment, in comparison with competing products or benchmarks, or within the context of a complete portfolio.

Current Morningstar Annuity Analyzer and Annuity Intelligence Report clients will be migrated to the new Annuity Intelligence over the next 12 to 18 months, based on each client’s individual requirements. Morningstar Annuity Intelligence is available on a site-license basis to broker/dealers, institutions, and other financial firms. Subscribers who also use Morningstar Advisor Workstation will be able to link to the new tool directly through Advisor Workstation later this year.

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