Close Close
Popular Financial Topics Discover relevant content from across the suite of ALM legal publications From the Industry More content from ThinkAdvisor and select sponsors Investment Advisor Issue Gallery Read digital editions of Investment Advisor Magazine Tax Facts Get clear, current, and reliable answers to pressing tax questions
Luminaries Awards

Life Health > Annuities

Insurance Is an Asset Class: Idea File

Your article was successfully shared with the contacts you provided.

Robin Raju has been head of individual retirement at Equitable’s individual retirement business for close to a year, and he has been with Equitable and its affiliates since 2004.

He said one key shift he sees Equitable driving is an emphasis on showing how insurance fits in a client’s financial life.

More and more, Equitable advisors are talking about insurance as an asset class — part of everyone’s portfolio, alongside stocks and bonds, Raju said last week, in an interview.

“Insurance has a role to play,” Raju said.

Raju has a bachelor’s degree from the University of Scranton. He began working for Equitable in 2004. He spent three years at AXA Global Life and Savings in Paris, back when Equitable was part of AXA S.A. of Paris. He later was treasurer of Equitable’s holding company, Equitable Holdings, and business chief financial officer for Equitable’s life, retirement and wealth management businesses before he took over as head of the individual retirement business, in April 2020.

Traditionally, the rule of thumb has been that clients should subtract their age from 100 to determine what percentage of their assets to invest in stocks, then invest the rest in bonds.

What percentage of a client’s assets should come in the form of insurance defies that kind of simplistic approach, because analyzing insurance needs depends on a client’s age, the client’s tax situation and many other factors, Raju said.

But, once an advisor sits down with a client and helps the client develop a plan, “we think insurance is part of the solution,” Raju said.

Here are three other things Raju is seeing in the U.S. annuity market, drawn from the interview.

1. He sees the Securities and Exchange Commission’s Regulation Best Interest as a more practical version of the Labor Department’s fiduciary rule efforts.

Like the Labor fiduciary rule, Reg BI requires financial professionals to put the client’s interests first, and to document that they’ve done that.

“We think it’s perfectly appropriate,” Raju said.

Growth in interest in fee-based life and annuity products has been slower than growth in sales, but Raju said he thinks Reg BI will lead to an increase in sales of fee-based products.

“I see regulations continuing to evolve,” Raju said. “Insurers and broker-dealers need to be ready to adapt.”

2. He thinks most traditional life insurance agents who are still in the game have adapted.

Most of the agent advisors now offer holistic, end-to-end planning advice, not just ideas about which life insurance policies or annuity contracts to buy, Raju said.

Raju said he thinks that approach is helping to make sure that the products that are sold meet clients’ needs.

“It’s the right thing to do,” Raju said.

3. He believes the nature of retirement has changed.

In the past, Raju said, the kinds of affluent people who use Equitable products might have really retired when they reached retirement age.

Now, Raju said, many affluent people who are pulling back from longtime employers are starting their own businesses.

Equitable offers employee benefits products partly to meet the needs of affluent clients who “retire” by becoming entrepreneurs, Raju said.

Pictured: Robin Raju (Photo: Equitable)


© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.