LPL Financial Launches Fee-Based VA Platform for All Its Advisors

The VAs will also be less expensive than off-the-shelf annuities from those manufacturers—mortality and expense (M&E) fees on the VAs “have to be 65 bps or lower,” noted Moninger, with “no surrender charges on the back end.” As is standard practice, there would be additional costs for any riders to the VAs, which Moninger said were also chosen to complement each other, “each has

their own unique identity in the marketplace,” providing LPL reps and advisors with a “good cross section” of options.

The five providers on the FBVA platform are:

• Allianz Life Insurance Co. of North America and Allianz Life Insurance Co. of New York
• AXA Equitable Life Insurance Co.
• Lincoln National Life Insurance Co., and Lincoln Life & Annuity Co. of New York
• Prudential Annuities companies
• Sun Life Financial

Moninger said the strategy around the new platform was driven by demand from advisors, with LPL noticing that after the 2008-2009 crisis “advisors who once walked away from VAs were now showing up,” and showing interest in these protected, lifetime income vehicles. Add to that the first wave of boomers reaching traditional retirement age this year, and LPL decided, says Moninger, that “we have to give the fee based advisor the tools to be successful,” in providing retirement income solutions.

Part of LPL’s due diligence was, said Moninger, to “see what didn’t work in the past,” and correct for those deficiencies, while giving advisors “control over these assets on a discretionary basis,” providing transparency on data—“We made sure that flowed through,” allowing for integrated statements on performance and management of the subaccounts, all while providing model guidance for those subaccounts from LPL’s own research team. The intent, Moninger said, was to “to improve our client experience, and also help advisors run their practices more efficiently.”