Financial Advisor: "Favorite Child: Stripped-down, low-cost variable annuities are selling surprisingly well."
In Financial Advisor’s latest article, writer Ben Mattlin reaches out to Jefferson National President Larry Greenberg to gain insights on the recent trends within the variable annuity industry. Last year, sales of VAs fell by 4%, however, Mattlin notes the one type of VA that was an exception: the simple low-cost, low-benefit investment-only VA.
According to many experts, investment-only variable annuities are “a growing category in the industry.” Mattlin highlights the success of Jefferson National’s “popular Monument Advisor, an investment-only VA introduced in late 2005, [which] saw sales grow a whopping 77% in 2013 and another 4.5% last year to more than $760 million in 2014 alone.”
Mattlin quotes Greenberg throughout the article, including his insights on the power of tax deferral and the benefits of IOVAs. As Greenberg states, “Studies show that tax deferral can add upwards of 100 to 200 basis point of alpha to help increase returns—without increasing risk.” He goes on to say that low-cost IOVAs are “an innovative vehicle for asset location, a method to tax-optimize tactical strategies and liquid alternatives [and] a tool to enhance trusts or stretch assets for a next generation of clients.”
To learn more about the benefits of IOVAs, read the full article here.