Jefferson National’s Monument Advisor Now Tops 300+ Underlying Funds—6x more than typical VA—Unprecedented Tax-Deferred Solution to Manage Volatile MarketFirst Flat-Insurance Fee VA Continues Expanding Tax-Efficient Frontier with 60+ New Investment Options including Broad Range of Fixed Income, Ultra-Low Cost, Tactical and Leveraged
New York, NY and Louisville, KY—Nov 29, 2010—The crash of 2008 and the market’s ongoing volatility continue to stoke advisor demand for low-cost tools that provide more diversification and greater risk management. In response, Jefferson National’s Monument Advisor, the industry’s first flat-insurance fee variable annuity, has now set a new industry standard by offering more than 300 underlying investment options—6x more funds than the typical VA1—an unprecedented tax-deferred solution to help fee-based and fee-only advisors manage a volatile market.
Advisors and their clients can benefit from the addition of more than 60 new investment options, including a broad selection from Fidelity, ProFunds, Putnam and RydexISGI, as well as new options from Adaptive Allocation, Alliance Bernstein, Chariot, Invesco, Ivy Funds, PIMCO, and Timothy Plan. And in response to overwhelming advisor demand, the company also recently added the full suite of Variable Insurance Trusts (VITs) from Dimensional Fund Advisors.
“Jefferson National offers an unmatched lineup of more than 300 tax-deferred funds—6x more funds than the typical VA—to help advisors achieve greater diversification and manage risk, while controlling costs and minimizing the impact of taxes,” said Laurence Greenberg, President of Jefferson National. “Experts predict that volatility is likely to continue for the foreseeable future, so Jefferson National continues arming advisors with the tools they need to manage a challenging market and shore up their clients’ portfolios.”
Creating Tax-Efficient Frontier
By tax-deferring assets such as bonds, which generate ordinary income, or actively managed funds, which produce short term capital gains, clients can potentially earn higher returns and build more long-term wealth. A recent white paper published by Jefferson National concluded that tax deferral can potentially improve the performance of these tax-inefficient investments by as much as 100 bps, without any subsequent increase in risk.2
“In an environment where every single basis point of performance counts, tax-deferral strategies will rise in importance and the Tax-Efficient Frontier will emerge as an important new financial landmark,” said David Lau, the paper’s author and Jefferson National’s COO. To help advisors achieve this tax-efficient frontier, Jefferson National has added more investment options designed for active management, as well as a broad range of 11 new fixed income funds, one each from Dimensional and Ivy, two from Rydex|SGI, three from Fidelity, and four from Putnam, including Putnam Diversified Income Fund, one of the industry’s most unique fixed income strategies.
According to a recently published interview with Chip Roame, Managing Principal of Tiburon Strategic Advisors and recognized authority on the advisory market, three of the most important factors impacting advisors’ investment decisions right now are the high correlation of equity markets, an increased focus on cost savings and the implications of taxes.3
To help advisors control costs while minimizing the impact of taxes on clients’ assets, Jefferson National recently became one of the only VAs on the market to add the full VIT suite from Dimensional Fund Advisors. Dimensional’s funds are widely recognized for their diversification, low turnover, disciplined approach and innovative design. Ranked No.1 for advisor loyalty and market share in Cogent's Advisor Brandscape 2010, Dimensional now offers its suite of six diversified, efficiently managed funds, with the added advantage of tax-deferral through the industry’s first flat-insurance fee VA.
Turning to Tactical
Dow Jones recently reported that financial advisors plan to shift clients back into stocks as the market recovers. But, while more advisors are ready to reallocate into equities, they are still encountering resistance from clients.4 According to "State of Managed Accounts: Industry Outlook," a new report from Cerulli Associates, there is a loss of faith in traditional asset allocation and mean-variance optimization after the staggering losses in the crash of 2008, and investor sensitivity to the market’s volatility is one of the biggest challenges facing advisors.
“The big thing is that advisors attach value to selecting investments,” said Jeffrey Strange, associate director at Cerulli Associates in a recently published interview.5 “Especially in the past couple of years, advisors have sought very flexible programs where they could move all assets to fixed income, or move 30% to cash.” Likewise, in a survey done by Jefferson National, 68% of advisors said they are feeling pressure to revise their asset management strategy in the current market, and 63% are more likely to employ tactical management.
To meet this strong demand, Jefferson National has extended its lineup from ProFunds to include more of the leveraged and inverse funds that tactical managers consider especially effective in today’s volatile market.6 In addition, Jefferson National is now one of the only variable annuities to offer the Adaptive Allocation Portfolio, a multi-strategy, tactically managed fund which seeks to adapt to any market environment and has consistently outperformed the S&P.7 Jefferson National has also added the Chariot Absolute Return All Opportunities Fund, which provides multiple strategies within a single portfolio, “minimizing risks and seeking investment profits in an active, hands-on way,” according to the fund’s manager.
Setting New Standards
With 6x more funds than the typical VA, Jefferson National has set a new standard for investment option diversity. A broad lineup of 18 investment options from Fidelity Investments, one of the world’s largest providers of financial services with managed assets of $1.5 trillion, includes a Mid-Cap fund with the 5 Star Morningstar rating. A selection of 9 investment options from Putnam includes Putnam Voyager, one of the industry’s best performing large cap funds.7 Jefferson National has also added Alliance Bernstein’s Global Thematic Growth; Ivy Funds’ Global Bond and Global Natural Resources; Invesco Van Kampen’s Comstock, Equity and Income, and Growth and Income; PIMCO’s Global Multi-Asset and two options from Timothy Plan.
Jefferson National’s Monument Advisor has emerged from a crowded field of nearly 1,000 VA products sold by more than 100 different companies. It is recognized as the lowest-cost retirement vehicle on the market8 and the number-one RIA-sold VA for three consecutive years according to Morningstar VARDS Data.9 In addition to offering the industry’s largest selection of tax-deferred funds,10 Jefferson National also offers the industry’s most subaccounts with the Five Star and Four Star Morningstar Rating for a second consecutive year.11
With a flat-insurance fee of $20 per month12 no matter how much clients invest13, Jefferson National’s Monument Advisor is uniquely positioned to meet the needs of the rapidly growing market of RIAs and independent fee-based and fee-only advisors. According to Cerulli Associates, assets in the RIA space are growing at an annual rate of 15%, one of the fastest-growing segments in the industry14, and more than 65% of brokers surveyed said they would be interested in going independent.15
1Morningstar data as 12/31/09. 2Variable Annuities involve risks, including possible loss of principal. 3 Korn, Donald J., “Separate Ways” Financial Planning Magazine, November 2010 4 “Advisors Plan Move Back to Stocks,” Dow Jones, March 2010 5 Stock, Howard, “Why UMAs Fail to Excite Advisors,” Financial Planning Magazine, July 2010 6 Leveraged and inverse funds seek a -200%, -100% or 200% return of their indexes for a single day. Due to the compounding of daily returns, returns over periods other than one day will likely differ in amount and possibly direction from the target returns for the same period. Investors should monitor their holdings consistent with their strategies, as frequently as daily.The funds’ prospectuses describing correlation, leverage and other risks are available at www.profunds.com. 7Past performance is no guarantee of future results. 8For a $25,000 contract, Monument Advisor's $20 per month insurance fee is lower than 87% of all variable annuity insurance charges. For a $100,000 contract, the $20 insurance fee is lower than all variable annuity insurance charges (Morningstar data as of 12/31/09). 9Morningstar VARDS data as of 12/31/07, 12/31/08, 12/31/09. 10Morningstar data as 12/31/09. 11Morningstar data as of 07/15/10. 12Jefferson National’s Monument Advisor has a $20 flat insurance fee on more than 97% of our underlying funds. Certain funds also have a transaction fee ranging from $19.99 to $49.99 per transaction, depending on the number of transactions per year. See the prospectus for details. Like other variable annuities, the customer pays fees of the underlying funds selected plus the fees of any advisor hired. The death benefit is equal to the contract value, and is subject to investment risk. An optional Guaranteed Minimum Death Benefit is available for an additional fee. Please see prospectus for details. 13Contributions in excess of $10 million are subject to Company approval. 14Cerulli "Quantitative Update: Intermediary Markets," 2008. 15Cerulli Quantitative Update: Advisor Metrics,” 2008.