Nationwide, a US insurance and financial services organization, and Trust Company of America (TCA), one of the largest independent providers of integrated technology and custody for registered investment advisors (RIAs), have partnered to announce the fee-based Nationwide Summit fixed indexed annuity (FIA) has been added to TCA's Liberty platform.
Pending Department of Labor (DOL) regulation has shifted the focus of insured retirement products to fee-based designs, but the initial adoption by RIAs has been slow as fee-based advisors struggle to find a solution to householding this portion of the portfolio and charging a fee on the FIA. The addition of Nationwide Summit to TCA's Liberty platform addresses both issues, allowing the FIA to be viewed as part of the overall client portfolio and providing the technology to bill on the entire portfolio, according to Nationwide associate vice president of fixed annuity product strategy, Mike Morrone (pictured).
"With equity markets at or near all-time highs and as more clients near or enter retirement, we are seeing a fundamental shift in advisors moving from traditional asset managers to risk managers," said Morrone. "Summit is perfectly positioned to help protect a larger portion of the client's portfolio and help improve the risk-adjusted returns."
The fee-based Summit is exclusively available through the Annexus network of independent distribution companies. Nationwide and Annexus plan to continue to develop additional fee-based products that will help advisors meet an even broader range of client needs.
According to Morrone, the move is a reflection of the firm's performance on the annuities segment in 2017 which saw the firm introducing the only fee-based FIA offering access to the JP Morgan Mozaic Index (USD) via an indexed annuity launched in July 2017. Nationwide Group also offers the Clear Horizon index annuity, an open-ended cliquet structure linked to the S&P 500 Composite Stock Index.
"Nationwide continues to have its best year ever from a total annuity sales perspective," said Morrone, adding that from and FIA stand point, the firm is the #2 FIA provider in the third quarter of 2017, and continue to see solid FIA growth from a sales stand point. "We have almost doubled are FIA market share from 2016."
According to Morrone, fixed indexed annuities will continue to grow in 2018 with the firm expecting the FIA market to grow by +5% to +10% vs 2017.
"If interest rates start to rise and/or we see any type of market volatility, the FIA market may even grow faster than that," said Morrone, adding that the addition of Nationwide Summit to the Liberty platform provides advisors with a more diverse lineup.
"The ability to seamlessly integrate an FIA into an advisor's models is a game-changer for RIAs and fee-based planners," said Eric Henderson, senior vice president of life insurance and annuities at Nationwide.
There are over 1,300 structured products featuring JP Morgan indices in the US including 53 products linked to the JP Morgan Mozaic Fixed Income Index.
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