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Portfolio > Mutual Funds

Helping Navigate the Product Seas

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Steve Zaleznick has funneled his years of expertise as head of AARP’s financial services company to create a niche service for baby boomers and seniors that offers a full array of services and financial planning for their retirement years. He first put several building blocks into place, buying a quote service and other companies in the past couple of years to create Washington-based Longevity Alliance, which is designed to provide middle market investors selections from an array of financial and health products geared toward seniors. The “big issue is not the availability of products, but the availability of tools” to help people select those products, Zaleznick says. Older boomers and retirees, he adds, “are on their own in making choices, and my feeling was the time was right to help people navigate those choices.”

In 1999, Zaleznick founded and became the first CEO of AARP Services, Inc., a taxable subsidiary of AARP, which develops and manages a range of financial service and healthcare products for seniors. He began at AARP as a pension, tax, and age discrimination lobbyist, created an in-house legal office, and then served as general counsel of the heavyweight lobbying association for older Americans.

Now, at age 52, Zaleznick, as CEO and president of Longevity Alliance, has just put the finishing touches on a company whose mission is to find the best products from health insurance to annuities to long term care insurance from an open platform. Zaleznick negotiates the contracts with providers and sets the business terms, skills that were in full play when he led AARP Services.

What makes Longevity Alliance, which incorporated in September 2005, able to access an array of high quality choices while providing a needed service?

First, it acquired Iquote around the time of Longevity’s incorporation. IQuote helps search for the best term life insurance rate available. A larger piece came a year later with the acquisition of Long-Term Care Quote in September 2006, which includes the industry giants among its offerings. These acquisitions bequeathed to Longevity Alliance a group of dedicated employees who work out of Gilbert, Arizona, a suburb of Phoenix. Then, last spring, Longevity Alliance bought Momentum, a small publisher offering guidance-oriented monthly newsletters addressing financial, healthcare, and lifestyle issues facing boomers and retirees.

The fourth addition to Longevity Alliance’s portfolio of services came this March with a program called Longevity Financial that offers investment diversification through the basic asset classes of fixed income and equities. The service can provide advisory and broker/dealer relationships to the client.

Longevity Financial is designed to allow middle-market retirees with a $25,000 minimum investment and $100,000 to $2 million of investable income (from a variety of sources) to continue to grow their financial resources and generate the income they need to live on when they retire, according to Zaleznick. People are often afraid to “look under the hood,” and the new service will help them realize how much they need for retirement, he notes. The company wants to make the funds work for seniors rather than have them languish in CDs, bonds, or low-return vehicles. The core investments in the recommended portfolio include low-cost index funds, exchange traded funds, and other open-ended mutual funds. Portfolios can also include previously acquired mutual funds or securities that can become part of the investment advisory portfolio. Clients receive a list of funds and securities to choose from. The total expense to customers is about 100 basis points. Investment advice is offered through Cambridge Investment Research Advisors, the RIA arm of the Iowa broker/dealer, while securities are offered through Cambridge Investment Research, Inc.

Zaleznick wants Longevity’s focus to be more on asset allocation as opposed to actively managed funds, and wants to help older Americans realize they need more financial protection and resources.

“It is about the allocation. It is also about having people think about [their future]” he says. Zaleznick also argues that consumers should think about longer term care while they’re in their 50s when there is a greater possibility of passing the underwriting screens.

Elizabeth D. Festa is a freelance business writer based in Washington, D.C. She can be reached by e-mail at [email protected].


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