Build Income WITHOUT Sacrificing AUM


No, it’s not too good to be true. With our innovative approach, it really is possible to maximize income creation without sacrificing assets under management.

We’ve talked a lot about the necessary shift from asset accumulation to income planning. But it’s a concept that some advisors are hesitant about, especially if you’re worried that making the shift will cost you when it comes to assets under management. But what if you found a strategy that focuses on income planning while helping increase your assets under management? There is such a strategy, and we can show you how to get started. But first, let’s talk about why it matters.

Today’s economic situation is full of low-interest rates. Those rates, however, are starting to creep up and have a negative impact on our total return.  Worst yet, we are experiencing higher risk in bond portfolios.  In 2007, that risk was just over 4%. Today, it’s about 6.05%. This increase further complicates our decisions about how to generate yield and income inside of the portfolio. And there’s the risk that your client’s assets could drop to zero before their end of retirement.

The reality is that today’s environment makes the 4% rule that we used to use obsolete. It’s no longer a good benchmark. And that means that income planning going forward must change.

In addition to your clients running out of assets, planning the way you always have puts your reputation and potential referrals at risk. And, more importantly, your assets under management will slowly erode. It’s time to look at a better, more innovative way, to plan for income.

It’s called Income Alpha, and it allows you to reposition some of your assets under management while growing your lifetime client value. Using this approach, we’ve seen annuity sales increased by 62%–and many of those assets came from assets held away. But, more importantly, we’ve seen increases in client income of anywhere between 23-36%. That level of growth is significant for your business, but also for your client’s income.

Take 10 minutes to understand our innovative Income Alpha solution. Your clients will win, and so do you.  

Transformational Tactic

If you’re ready to help your clients reach their income goals, without lowering your assets under management, we have an innovative solution. Find out more about Income Alpha.

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A Better Annuity Strategy than “Set It and Forget It”


Many of us have believed in asset allocation strategies –  that is, shifting money management to a third-party and talking to our clients about the long-term. Their money is put inside variable or fixed annuities, and you and your clients just let it sit. It’s a “set-it-and-forget-it” mentality, and in less-turbulent times, it was a popular strategy.  But the global pandemic that we are still living with has shifted a lot of needs. 

Many people have lost jobs and are retiring earlier. Even more importantly, because of the volatility we are living with, there’s an increased interest in protected income. Today in America, there are $416 billion held in fixed and indexed annuities issued by insurance carriers. Not all of those are liquid, certainly, but according to a Gallup poll, 81% of those that bought a fixed annuity said they did so because they did not want to be a burden to their family.

All of this leads to a couple of opportunities:

  1. Most fixed annuities have been on the books for a long time. They do not have income riders — but the need to have protected income is an important part of their portfolio. If you have not looked at an Income Alpha strategy for these clients, I would encourage you to do so. A certain amount of protected income can actually leverage the portfolio to a greater probability of retirement success, a claim we have the numbers to back up. And, going back to the reason people buy annuities, it’s because they don’t want to become a burden to their families. Protected income is the best way of ensuring this doesn’t happen. It’s important to talk to your clients about using the asset appropriately.
  2. Under the Pension Protection Act, you can shift that tax-deferred asset with a 1035 exchange. If you use that asset for two of the six ADLs, then not only is your cost basis your gain, but also the explosion of market value of an LTC event are all received tax-free. So, you have shifted tax-deferred to tax-free. When you think about the increase in tax rates that are likely to happen over the next three to five years, I believe that your clients will be very receptive.

In total, there are more than $1.3 trillion of total annuities sitting on insurance carriers’ books right now. Think about that for a minute. Are your clients’ annuities performing like you thought that they would? Have those benefits been maxed out over the 10-year period available with an income rider? Can you increase income a little by looking at alternatives? Would a different vehicle preserve their assets better?

Add value to your clients by making a full evaluation of their annuity products. Our Annuity Audit service, backed by Morningstar Intelligence, is available to help. I encourage you to reach out to our team to learn more. We’ll work up a complete analysis and provide you with clear information to share with your client. Together, you can make an intelligent decision as to whether their current product is performing well or if there are changes to be made. And if there are, reach out to our retirement income consultants at (800) 589-3000 for more information.


Transformational Tactic

There are opportunities to increase your business by evaluating current annuities. You’ll improve your clients’ portfolios without reducing assets under management.

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