Jefferson National Eclipses $3 Billion in Sales to RIAs and Fee-Based Advisors of Flat-Fee Investment-Only Variable AnnuityMore Than 30% Growth in New Advisors Using Monument Advisor Platform in 2014
Louisville, KY—February 2, 2015—Jefferson National, a market leader in tax-advantaged investing , today announced that it has surpassed more than $3 billion in sales to Registered Investment Advisors (RIAs) and independent fee-based advisors since the launch of Monument Advisor, the industry’s first Flat-Fee Investment-Only Variable Annuity (IOVA).1 With increased sales, the company also achieved record account growth, bringing the total to roughly 11,000. During 2014, a record of nearly 700 new RIAs and fee-based advisors incorporated Monument Advisor into their practice, growth of more than 30 percent, bringing the total number of advisors to nearly 3,000. Monument Advisor’s low-cost, no-load tax-advantaged investing platform offers the industry’s largest selection of underlying funds2, with close to 400 investment options from more than 40 different fund families, including more than 65 alternative investment options.
“We built our business from the ground up to deliver superior value for RIAs and fee-based advisors with a tax-advantaged investing platform tailor made to meet their needs,” said Laurence Greenberg, President of Jefferson National. “Now, with our sales since inception surpassing the $3 billion threshold, it’s clear that more RIAs and fee-based advisors are adopting Monument Advisor because both they and their clients can benefit from the power of low-cost tax deferral, with no commissions, a broad selection of investment options, and a powerful portfolio management platform.”
IOVAs are a relatively new category of variable annuity designed to maximize the benefits of tax deferral. Jefferson National was the first to pioneer a flat-fee no-load IOVA for the growing market of RIAs and fee-based advisors, launching Monument Advisor in 2005. While the traditional variable annuity industry is now adopting IOVAs, it continues to target a commission-based sales approach. IOVAs are growing rapidly, doubling over the past two years, with sales of nearly $5 billion as of Third Quarter 2014 compared to sales of $2.4 billion as of year-end 2012.3 “Across the industry, we see the strong momentum of IOVAs continuing, as more advisors use tax deferral to optimize their investing strategies and manage today’s complex market dynamics,” commented Greenberg.
According to surveys from Jefferson National, 96 percent of RIAs and fee-based advisors say tax deferral is important to generate wealth and manage tax implications for their clients, 86 percent expect that tax deferral will be more important in the future4, and more than 85 percent say tax deferral is one of the best ways to accumulate more retirement savings.5 Moreover, research has shown how tax-deferred vehicles, such as a low-cost, no-load Investment-Only Variable Annuities have the potential to increase returns by 100 bps or more—without any subsequent increase in risk.6
Alongside the growth of IOVAs has been the expansion of both RIA and dually registered advisor channels. According to a recent report from Cerulli Associates, RIA and dually registered advisor assets are expected to reach 27.9 percent market share by year-end 2018, up from 19.8 percent as of year-end 2013. The RIA channel alone experienced the strongest growth among the independent channels in 2013, with total assets increasing 17.1 percent to $1.67 trillion in 2013, and market share based on assets expanding from 9.2 percent in 2007 to 11.9 percent in 2013.7
“As the RIA and fee-based advisor channels continue to grow, so will their clients’ needs for more tax-efficient investment strategies to help build their wealth, mitigate the impact of taxes and create reliable streams of income,” noted Greenberg. “We’re always listening to the advisors we work with and continuing to enhance the Monument Advisor platform, so that they can effectively manage their clients’ portfolios and help them achieve their goals.”
1Jefferson National’s Monument Advisor has a $20 monthly flat insurance fee. Additional fees ranging from $19.99-$49.99 will be assessed for investors wishing to purchase shares of ultra low-cost funds. See the prospectus for details. 2Morningstar Data as of 12/31/14 3Morningstar data as of Third Quarter 2014 4Power of Tax Deferral Survey, Jefferson National, June 2014 5Retirement Income Solutions Survey, Jefferson National, April 2014 6The Tax-Efficient Frontier: Improving the Efficient Frontier with the Power of Tax Deferral, by David Lau, Jefferson National, 2010. 7RIA Marketplace 2014: Growth Drivers in an Accelerating Industry Segment, Cerulli Associates, 2014