Can RIAs ever love annuities? Apparently so.
Dan Skiles, executive vice president of Shareholders Service Group and AdvisorOne contributor, explained more about the recent announcement that SSG’s advisors will now be able to offer Jefferson National’s Monument Advisor low-cost variable annuity, one specially designed for fee-only advisors.
“These guys approached us and came into our offices in May,” Skiles (left) said at the 2012 FPA Experience in San Antonio Monday afternoon. “They said, ‘we’re an annuity company and we’ve got a fantastic product for advisors.’”
“Our experience with annuity companies has traditionally not been like that,” he diplomatically added.
As they got to talking, Skiles and his team realized the product would satisfy a need they increasingly see among the advisor and clients with whom they work.
“Often, an advisor will have a client that has an annuity they were sold by someone else,” he explained. “They almost have to ignore it because the costs involved with a 1035-exchange make it prohibitive to move. There’s nothing they can really do to help them.”
Now, with the low-cost, fee-only structure of the Jefferson National product, they can do a 1035-exchange into the product and be able to handle that business on behalf of the client.
“They’re able to charge management fees on it and do what they would with any other account they have with Shareholders Service Group account,” he said. “It’s all about another great opportunity for tax-deferral.”
Skiles says the response from the advisors with which the company does business has been one of surprise.
“We held a web seminar on the product last week and they didn’t realize this type of opportunity was available,” he noted.
The product will exist on the Jefferson National platform but the “plumbing” has been set up in a way that’s seamless for the advisor.
“Larry Greenberg [Jefferson's president] and his team are great and the advisors feel well-treated,” Skiles concluded.
Check out in-depth coverage of FPA Experience 2012 at AdvisorOne.