Moshe Milevsky, York University finance professor and foremost international authority on annuities, is selling his QWeMA Group consulting firm to retirement income data provider Cannex, in a deal that preserves QWeMA group’s unique intellectual property: Dr. Milevsky himself, who will join the Cannex board and oversee its quantitative research.
“Cannex has been working closely with Moshe Milevsky for more than 17 years and was QWeMA’s first client,” said Lowell Aronoff, CEO of Cannex, in a news release announcing the deal Monday morning. “The two companies are a perfect fit because we share similar philosophies about the need for education and awareness about how all types of annuities fit into retirement plans.”
Under the agreement, QWeMA, which stands for Quantitative Wealth Management Analytics, will retain its name as an independent Cannex unit and continue to help institutional clients like Pacific Life, John Hancock and Principal Financial Group help their advisors and clients optimize the quantitative aspects of portfolio decisions.
But Cannex’s larger infrastructure will broaden QWeMA’s ability to help financial advisors provide guidance on optimal spending rates and answer such questions as “What is my client’s annuity policy worth?” and “Should I turn on my client’s annuity’s living benefit?”
QWeMA’s staff will move 10 blocks away to Cannex’s downtown Toronto headquarters, and Milevsky will cede day-to-day operational control to Faisal Habib.
ThinkAdvisor (a sister publication of LifeHealthPro) asked Dr. Milevsky, a veteran contributor to Research Magazine and ThinkAdvisor, what the sale of QWeMA means for the retirement income industry and for him personally:
What is the competitive importance of this sale? What does the retirement income consulting landscape now look like?
Cannex has a unique advantage in providing data (prices, quotes, comparisons) on all aspects of income annuities. Basically, if you are a financial advisor anywhere in North America and want to see and/or compare what various insurance companies are offering for a life annuity, then Cannex is pretty much the only game in town. Sure, you might call up the individual insurance companies who sell annuities, but the process is much more efficient and quicker if you pay a few dollars and run a Cannex quote.
They are doing similar things for variable and deferred annuities. In my mind, they are the Bloomberg Terminal of annuities.
QWeMA, on the other hand, is about the analytics of decisions around retirement income in general and annuities in particular. We have extremely powerful and efficient tools, but need a better way of distributing and implementing those tools. This is where Cannex comes in.
So, for example, if you are a financial advisor who uses Cannex and would like to get answers to questions like: When should I buy the life annuity? How does it impact the sustainability of my retirement plan? What is the optimal age? What happens if interest rates go up by 100 or 200 basis points? What will the annuity pay? Should I turn on my living benefit on my VA+GLB? QWeMA can offer answers to all of those. So QWeMA will be using the Cannex platform to offer our unique analytics.
Also, in the Canadian market I have been doing a bit of work on mortgage financing (actually, I’m known for that more than my work on annuities) and there again Cannex is a powerhouse in the “data and prices” business.
We are going to work on cleaning up and packaging their historical data…I explain this to my academic colleagues as the Centre for Research in Security Prices (CRSP) of the insurance world.
Which industry players are served by Cannex vs. QWeMA?
Cannex has hundreds of financial institutions as clients, who then serve hundreds of thousands of individual financial advisors, insurance agents, brokers, planners, etc. If you are anywhere in the financial services and need a reliable and up-to-date comparison of “who is paying what” in the annuity market, you dial into Cannex and run a survey. QWeMA serves a much, much smaller sliver of that universe. We are going after the same market — financial intermediaries who help individuals make better decisions around retirement income planning.
Why is Cannex the right outfit to take custody of your “baby”?