Jackson Insurance Reps Can Now Sell Bank CDs, Too
Jackson Federal Bank, a subsidiary of Jackson National Life Insurance Company, Lansing, Mich., is marketing two types of bank certificates of deposit through its financial representative distribution channels as well as its banking channels.
One CD, MarketPath, links its return to the performance of the S&P 500 for five-, seven- or nine-year terms. Its structure is similar to that of JNLs equity index annuity.
The other CD, SurePath, is a traditional fixed-interest CD, available in time periods of six months, one year, 18 months, two years, and three years.
Minimum investment for both products is $5,000. MarketPath is currently available only for Individual Retirement Account funds. SurePath is available for both IRA and non-IRA funds.
“Were distributing these CDs through JNLs insurance agent, broker-dealer, and institutional marketing group channels as well as JNBs 14 bank branches in Southern California,” says Sean Blowers, vice president-thrift products for Jackson National Life Distributors, a marketing arm of JNL and JFB.
Why offer CDs–a bank product–through insurance and other non-banking reps?
“Before we did this, when insurance clients expressed interest in owning CDs, our insurance reps couldnt help them” directly, says Blowers.
That worked against asset-gathering goals, as well as put the reps at a competitive disadvantage, he contends.
Now, the CDs expand the reps product menus, observes Blowers. And because of that, the reps can offer more products and services to clients than previously, he adds, noting that this is one of the advantages made possible by the Gramm-Leach-Bliley Act of 1999, which broke down the walls between insurers, banks, and securities firms.
JNL bought the California bank–then called the First Federal Savings & Loan Association of San Bernadino–in 1998, in preparation for the coming world of financial convergence that GLB soon made possible. It later renamed the bank and broadened its distribution to include the non-banking channels listed above.
The new CDs rolled out in late December, with nation-wide distribution via the financial rep sales channels. In the first three months of 2001, they pulled in over $19 million in deposits, primarily in the fixed product.
The state of the economy has helped fuel resurgent interest in banking products, says Bowers.