What You Need to Know
- More than 15% of a typical advisor’s client assets are held in annuities.
- Using an open-source annuity can solve product comparison problems.
- One challenge is to keep track of all of the annuity features and riders.
Many advisors hesitate to make a major move to true independence because of the Herculean effort required to execute such a transition successfully. After the ACAT of IRAs, taxable brokerage accounts and the numerous investment accounts that clients may have, transitioning client assets to your new independent RIA is a feat in itself.
Not to mention the potential attrition; on average, almost one-fifth (19%) of client assets are lost when advisors move firms, according to a recent survey conducted by research and consulting firm Cerulli Associates.
Losing some clients is a likely byproduct of going independent, but now you no longer have to automatically leave your annuity assets behind. Traditionally, it hasn’t been easy or even possible for advisors to bring annuity assets over to their new firm; a dearth of advisory options, few fiduciary annuity platform partners, and lack of tech integrations made this nearly impossible.
Times are different now. Newly-available data integrations with wealth management platforms like Orion, BlueLeaf, and others provide access to view annuity assets and report on them. So, while it might be a daunting thought, there are successful strategies to overcome the client annuity transition challenge.
When one chooses to leave their broker-dealer and transition their client assets to their new RIA firm, there are a number of questions to consider. Do they leave annuity assets at their former broker-dealer? Pursue becoming a broker-dealer themselves? Become a hybrid? Get dually registered?