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April 23, 2020 at 02:06 AM
RetireOne will be offering registered investment advisors and fee-based advisors a new way to cope with low, low interest rates: access to structured notes from Halo Investing Inc.
The companies announced the new structured notes and annuity distribution relationship Wednesday.
The companies also announced that RetirementOne will provide back-office services for an annuity marketplace that Halo is building.
RetireOne is a San Francisco-based retirement products distributor that was set up in 2011. It has focused on offering fee-based annuities and fee-based life insurance products.
Halo is a Chicago-based company that has been trying to introduce U.S. investors to the world’s $3 trillion structured notes market.
(Related: RetireOne Acquires Edelman Financial’s Broker-Dealer Unit)
A structured note is a little like the investment component of an indexed annuity, sold without the annuity wrapper.
When a life insurer creates an indexed annuity, it may use its own investments in notes, bonds, and other debt securities to support annuity principal and income guarantees. It may then let the purchaser choose from a menu of investment options, such as the performance of the S&P 500 stock index, to get a chance to earn extra income.
Behind the scenes, the life insurer often uses derivatives contracts to power the annuity contract investment option menu.
