Jefferson National Helps Clients Save More than $60 Million in Insurance Fees with Flat-Fee VAPower of Low-Cost Tax Deferral Increasingly Important as Advisors Seek Solutions to Help Clients Accumulate More
Louisville, KY—November 5, 2013—Jefferson National, a recognized innovator of tax-advantaged investing solutions, has helped Registered Investment Advisors (RIAs), fee-based advisors and the clients they serve to save more than $60 million in insurance fees1 since launching Monument Advisor, the industry’s first flat-fee variable annuity (VA).2
Jefferson National pioneered its unique flat-fee VA to address the number-one complaint against variable annuities—their high asset-based fees erode the value of tax deferral and diminish portfolio returns. A 1035 exchange from a traditional variable annuity to Jefferson National’s flat-fee VA allows clients to reduce their average annual insurance fees and over time accumulate measurably more to generate more retirement income. Exchanging from a traditional VA, with insurance fees averaging 1.35% per year, to Jefferson National’s flat-fee VA of $20 per month—or just $240 per year—clients can save an average of $2,500 in the first year alone.3 Over a time horizon of twenty years, this $2,500 fee savings can compound tax-deferred to generate an additional $144,794.4
“The retirement income challenge is very real—and there is no silver bullet if you haven’t accumulated enough assets,” said David Lau, Chief Operating Officer of Jefferson National. “We help investors build their wealth through the power of low-cost tax-deferred investing—maximizing the fee savings and letting it compound to help address Americans’ need to accumulate more for retirement. And with tax hikes in place, advisors understand that tax-deferral is more important than ever to help clients reach their long term financial goals.”
Jefferson National’s innovative approach to variable annuities creates greater consumer value and a more efficient tax-deferred investing vehicle, with low cost, no commission and 10x more investment choices, including funds that provide retirement income with built-in downside protection. Jefferson National’s fee savings, accumulation potential and the added retirement income it can generate through tax deferral becomes even more important at a time when many traditional variable annuities are raising fees and restricting investment choices, while reducing or eliminating clients’ income benefits. Today, the demand for tax deferral is especially urgent as taxes rise in a time of ongoing volatility. More than 90% of advisors recently surveyed said that their clients are concerned about the rise in capital gains tax, and more than 70% of advisors are considering using a low-cost tax-deferred account to mitigate the impact.
1 Total client savings derived from annual average Monument Advisor contract size multiplied by Morningstar average M&E of 1.35%, minus the $240 flat fee of Monument Advisor, and then multiplied by number of policies in force. Data spans May31, 2005 through October 31, 2013. 2Jefferson 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. 3 Annual savings are based on Morningstar average M&E of 1.35%, Monument Advisor flat fee of $240 and Monument Advisor average contract value of $224,355 (as of 12/31/12). 4 Total Hypothetical illustration based on contract size of $200,000, the $240 flat fee of Monument Advisor, Morningstar average M&E of 1.35%, and assumed growth rate of 6%. Estimated annual savings and accumulation assume the contract value grows at the assumed growth rate, and excludes any differences in underlying fund charges.