Allianz Life Insurance of North America (Allianz Life) is pitching US retail investors the Retirement Foundation ADV Annuity, the first fee-based fixed index annuity (FIA) offered by the insurer. Retirement Foundation ADV is a fee-based solution featuring principal protection and credited interest from market downturns, as well as a tax deferral and the potential to earn interest based on the performance of market indices. Retirement Foundation ADV also offers guaranteed income for life and a death benefit for beneficiaries.

This is Allianz's first fee-based FIA and part of the company's entry into providing these type of products to fee-based advisers, according to Matt Gray (pictured), senior vice president of product innovation at Allianz Life. "This product is an interesting proposition, as it provides a potential upside linked to the performance of the underlying indices, but also downside protection," said Gray. There is no commission built into the product, which has been designed to fit into an overall portfolio managed by fee-based advisors, according to Gray.

"This specific product has built-in lifetime increasing income, so when clients want to begin taking income, they can chose an income payout that increases based on the performance of their index allocations," said Gray. "This latest launch complements our existing offerings in the annuity space. There is a growing market demand for fee-based products in the US market."

Retirement Foundation ADV has a seven-year withdrawal charge period and has been designed to help investors address both phases of retirement: accumulation - by potentially earning interest through a choice of index allocations; and income - in the form of lifetime withdrawals. The FIA provides an income benefit rider feature that is automatically included at an additional cost and guarantees to increase income withdrawal percentages, beginning at age 45 for every year a customer waits to begin taking income.

The product uses a simple design with one crediting method that brings growth potential provided by four index allocation options or a fixed-interest allocation option. Investors going for the index-linked option will be exposed to the annual point-to-point performance, with a cap on the S&P 500, Nasdaq 100, and Russell 2000 indices, as well as the Bloomberg Dynamic Balanced Index II, which was created by Allianz Life to use exclusively in its preferred annuities range.

The index reflects the performance of an allocation strategy that shifts between the S&P 500 and a bond index. On a daily basis, the index dynamically allocates between the two indices, based on their historical realised volatility to stabilise index performance over time. A fixed interest allocation is also available.

The product is "very similar" to a commission-based annuity within Allianz's offering called Core Income 7, "which is the top selling seven-year FIA in the US market and a very popular product in the broker-dealer channel", according to Gray. The annuity offers an annual point-to-point with a cap on the S&P 500, Nasdaq 100, Russell 2000 and Bloomberg Dynamic Balanced Index II.

The Bloomberg US Aggregate Bond Index has featured in over 70 structured products in the US (31), Canada (26), Sweden (14) and Chile (one), including in 11 equity-indexed annuities sold in the US by American Equity, according to SRP data.

Lincoln Financial Group has also broadened its suite of guaranteed lifetime income solutions with the introduction of new fee-based variable and fixed indexed annuities.

The new products are aimed at financial advisors seeking products that provide savers with a known source of income through a selection of investment choices, and no surrender charges. The new products give advisors more fee-based choices, and the variable annuities offer the same guaranteed lifetime income riders that are available through Lincoln's core commission-based solutions: Lincoln Choiceplus Assurance, American Legacy and Lincoln Investor Advantage, which offer exposure to the S&P 500 and the S&P 500 Daily Risk Control 5% indices, which was featured in a recent structured note issued by Barclays. SRP data shows that there are 10 structured notes featuring S&P 500 risk control indices.

'Our expanded portfolio is built to match the way advisors do business and how they construct portfolios for their clients,' said John Kennedy, senior vice president and head of retirement solutions distribution for Lincoln Financial Distributors, in a statement. 'Guaranteed lifetime income solutions are important for helping consumers achieve their retirement objectives.'

The new range of fund-linked annuities is now available within Lincoln's variable annuity portfolio and include American Legacy Advisory, Lincoln Choiceplus Advisory and Lincoln Investor Advantage Advisory. The products are the latest addition to Lincoln Financial's offering of fee-based products.

Lincoln was the first in the US life insurance industry to launch a fee-based, fixed-index annuity developed exclusively for registered investment advisors. Since launching the Lincoln Core Capital Annuity, the company has added fee-based versions of Lincoln Covered Choice 5 and 7 to its fixed-index annuity portfolio.

The most used indices in the US annuities market are the S&P 500 (featured in 82 of the 84 annuities listed) and the Nasdaq 100 (which features in 16 annuities), while proprietary indices from investment banks such as the Bloomberg Barclays Aggregate Bond Index (11) and the ML All Convertibles Investment Grade (two) also appear in a number of products, according to SRP data.

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