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February 19, 2014 at 10:00 AM
‘This is not your father’s variable annuity,’ to paraphrase the 1970s-era Oldsmobile commercial, might fairly be said of Jackson National’s Elite Access platform, except that in some sense it is your father’s VA — with a very contemporary twist.
Variable annuities have been known for an alphabet soup of pricey guarantees but, stripped down, their core benefit is the tax-deferred wrapper that allows an investment to grow free of taxes until the income is distributed after age 59 ½.
Jackson National, one of the industry’s largest variable annuity underwriters, sells those annuities, but it is going back to basics with Elite Access, selling annuities designed mainly for their tax advantages but with subaccounts that include 20 different alternative categories and strategies.
That of course is the contemporary twist, and since alternative investments and strategies are not as widely understood as the mainstay equity-based investments typically included in VAs (including, of course, Jackson National’s), the Lansing, Mich.-based firm has been taking its show on the road.
“When we launched Elite Access in 2012, advisors were still trying to understand what alternative investments are,” Jackson National’s head of sales training, Bill Burrow, tells ThinkAdvisor.
“So we explain how to break them down between alternative assets and alternative strategies. That’s the first part of our training.
“The second part of our training is helping them understand how to implement them in their practice,” for example detailing how a convertible arbitrage strategy would work in a particular market environment.
To that end, the firm has aggressively offered training across the country in different formats, saying it reached more than 10,000 advisors in 374 events in 2013, with plans to expand that reach this year.
“We’ve recognized that advisors learn in many different ways, so we have robust live in-person training sessions… we have a conference call series for a global view on how to think of alternative investments as well as more granular strategic views; and we have a virtual series as well as our Elite Access site where our managers discuss their strategies in detail. Last year 450 advisors logged on,” Burrow says, adding that the firm even has a LinkedIn Group with 213 members so far.
Just as advisors have different learning styles, they also have different investment management approaches, and Burrow says the firm offers solutions for three types of advisors it has identified:
Do-it-yourself advisors— “they’re the ones that understand how all the pieces work,” he says — can take an a la carte approach to portfolio design with a diverse set of both traditional and alternative products.
