Prudential Financial plans to distribute a relatively new type of income access arrangement through LPL Financial's managed accounts platform.
LPL has agreed to offer a Prudential an income creation spigot — which could be structured as a contingent deferred annuity — to its 29,000 financial advisors.
Prudential made news earlier this year by introducing a contingent deferred annuity contract. A CDA contract provides a way to bolt what amounts to an annuity income spigot onto an existing investment portfolio, without a need for a client to move the account value into funds managed directly by the annuity issuer.
Prudential noted in a comment after the original version of this article appeared that the income overlay arrangement might come in the form or might be provided in another way.
What it means: Prudential said it thinks the income overlay approach will appeal to wealth managers who have not yet made much use of ordinary retail annuities.
The contract: Prudential announced the CDA contract project in January and launched the product in July with help from Dimensional Fund Advisors and Fiduciary Exchange LLC, the parent of the FIDx insurance exchange.
Prudential writes the CDA contracts through Pruco Life Insurance Co., a life insurance company based in New Jersey.
Other companies have tried offering CDA contracts over the years, but the Prudential effort appears to be by far the biggest and most visible launch within recent memory.
Prudential and LPL: Prudential and LPL said in November 2024 that they were forming a strategic relationship and that Prudential's Prudential Advisors business would move onto the LPL wealth management platform.
The new income overlay arrangement will be an addition to the menu of Prudential products that LPL advisors already offer, according to Prudential.
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