New variable annuity from Lincoln targets fee-based advisors

Lincoln Financial Group is targeting fee-based advisors with a new variable annuity developed in collaboration with BlackRock Inc.

The Lincoln Core Income, built with iShares product, incorporates an investment selection made up exclusively of exchange-traded funds. Created for fee-based advisors, the product provides guaranteed income for life that can increase each year, the companies said in a press release.

“Retirement savers are facing unprecedented challenges,” said Will Fuller, president of Annuity Solutions, Lincoln Financial Distributors and Lincoln Financial Network, in a release. “People are living longer, equity markets are volatile and interest rates remain low, putting more pressure on their savings to work harder for longer to provide adequate income. Annuities can provide income for life that is guaranteed and an essential strategy for savers who want to know they have predictable income.”

Salim Ramji, head of BlackRock’s U.S. Wealth Advisory business noted that a growing shift toward fee-based models prompted the collaboration between Lincoln and BlackRock to meet the needs of advisors looking for simple ways to help clients with low-cost options using ETFs.

The collaboration combines Lincoln’s annuity expertise with BlackRock’s iShares portfolio construction and investment management expertise. The new variable annuity is scheduled to be available in the first quarter with features including no surrender charge, costs under 2 percent, guaranteed income that increases annually, underlying funds composed entirely of iShares ETFs, and return of investment death benefit.

Earlier this year, Transamerica, the U.S. insurer owned by Aegon NV, teamed with BlackRock to offer variable annuity portfolios comprising ETFs that weigh factors other than a stock’s market capitalization.