Flat-fee variable annuity provider Jefferson National announced Monday that recent additions to its sub-account portfolio means it has more than 65 tax-deferred funds in the alternative investment category, which it claims is the most of any variable annuity currently offered.
The company now offers BFP Capital Management and W.E. Donoghue, the only variable annuity platform to do so, and Hatteras Funds will be offered beginning June 15. It also added new funds from existing partners: Invesco, Legg Mason, Janus, Fidelity Investments and Wilshire Funds Management.
“We’ve done studies that show tax deferral can add as much as 100 basis points of performance annually,” Laurence Greenberg, president of Jefferson National, told AdvisorOne. “Now, tax deferral had been largely dismissed by advisors because the focus was really on annuity riders and guaranteed products. Those cost money, which cancelled out the benefits of tax deferral. But now we can add the tax deferral piece back in with alternatives, and that’s a huge benefit.”
Greenberg said that when the company focused on the asset classes that needed tax deferral, alternative investments were a natural addition to the portfolio.
“We also have relationships with almost 1,700 RIAs across the country that are using Jefferson National’s Monument Advisor. They kept asking for more offerings in the alternative space. We heard them and acted to fulfill that demand.”
He noted the company’s recent panel at the NAPFA National Conference in Chicago, “Alternatives, Next Generation ETFs and the Tax-Efficient Frontier: New Tools for the New Normal,” in which tax inefficiency as a barrier to entry with advisors and alternatives was discussed.
“Our latest addition of alternative strategy investment options goes right to this point,” Greenberg said.