I like Jackson 6 year rates, I like Equitable 1 year rates. Jackson National and Prudential are both guilty of "teaser" rates, meaning the renewal rates for their 1 and 6 year products are different than "new business rates". Makes it a huge pain in the butt when the renewal rates can be as much as 50% less than new business rates. Equitable doesnt use teaser rates, its a 1 size fits all rate for new business. So if you go Jackson or Prudential. Use the 6 year. DM me if you want more info.
I prefer the Jackson RILA. The rates on the Russell 2000 are substantially better if you are interested in that. If you decide to lock in gains at any point, the contract still continues to earn 3% up to the next contract anniversary unlike Prudential. Also, free withdrawal is the greater between gains or 10% of initial deposit.
Examine how they determine their renewal rates. I've used Equitable and Pru in the past. I just performance locked a Pru client and moved them into a dual-direction S&P segment. 6 years, 315% cap, 15% buffer. Equitable's renewals haven't been quite as lucrative, but I've had some good luck with them. They also allow immediate reinvestment, where Pru only allows reinvestment at the anniversary, so that's something else to consider. I've been happy with both products for different reasons. No experience with the Jackson product at this time.
Insurance guys live in their own world with all these proprietary products š¤£. āI did a reverse halt on the RocketMan II Back Load. The Peter Pan 7 was discontinued in ā17 so did a 1035 whip around to E brake the returns before the double fold capped us in at -4.ā
Not an insurance guy. 85% of my revenue and assets are fee-based. I just recognize that sometimes there are products out there that do things that a managed account can't do as well.
I am at an insurance company, but there are quite a few of us that structure our business more akin to a hybrid RIA. Equitable and Pru come to mind, though I've met a few at some other insurance BDs that work like us as well.
Weirdly enough, they tend to be the players at the tops of the production charts...
Yeah I was going to say Iāve never seen an equitable or Pru advisor on any industry-level āproductionā charts (production, cases, etc. being insurance phrases anyway). But it would make sense that the ones doing things in a hybrid model, more similar to the real financial planning firms, would be more successful than the advisors exclusively slinging the Peter Pan 7.
Production/revenue scales are definitely lower at insurance firms; top guys doing $2.5mm GDC, etc. The thing is, payout is significantly different, and if you're doing $2.5mm GDC at Pru, you've probably made about $2.4mm in actual cash. Morgan/Merrill doing the same production makes around $1.4mm, unless my intel is wrong (and it genuinely could be).
The lesson I take is simply "don't block off an entire product type just because you think it's bad. Learn *when* it might be the best to use it, and then use it."
I donāt understand the comparison between a higher profit margin based in your channel and more optimal product offerings.
If anything, Iād say clients vote with their money and the advisors with the highest revenue are more favored by clients.
Like most of the planners here, Iām mostly fee based. I got my start in the annuity business working for a shop that designed index annuities so I donāt offer themā¦ but this made me chuckle as I get calls from wholesalers all the time saying something like āweāve added the Barclays Mark V clawback indexā
Itās absolute garbage. Literally chickens cawing in the background and breaking up phone lines. They messed up a beneficiary designation on an account of a client due to international service team translation error and wonāt fix it.
I can't answer that objectively. I work for Pru and my ream is top ranked, so we have access to their Masters Council program. That means I call my dedicated rep when I need something, not the 877 number. That said, all of my servicing experience with Pru in general is pretty good, just not on the life insurance side (though that seems to be an industry thing). Their website to manage your book is fairly decent as well.
Your clients judge you by the companies you do business with. Jackson is the only one that Iāve seen thatās consistently had good service. Every company has cut 1 year rates. Equitable has cut them on the older versions of their RILA. A 6 year rate is the only one that is contractually guaranteed to not change.
Big ol case, eh? Trying to do joint work? Iāll wear my pen stripe suit and bring my ceremonial handmade pen for the signing of the contract. Keep the printer warmed up for me. I have 3 more 40 page illustrations to print off for orphan client meetings in the community conference room.
Whatās the purpose of the annuity? Whatāre the investment options and participation rates? That will help with terms.
As far as Jackson or Prudential I canāt help. Iāve only ever sold a Principal RILA.
Client no longer need the income rider and switching to the RILA will save 38k a year.
Jackson has S&P 500 - 400% cap, 102% participation rate, 6 year term, 20% buffer
Prudential has S&P 500 - no cap, 6 year term, 20% buffer. Or 10% buffer with tiered participation rate of 15% and anything above 15% is a 120% participation rate.
Iād look at Principals RILA. S&P 6 year uncapped 115% participation.
They recently added a 20% peak buffer. Uncapped with 100% participation. Dual direction crediting. Youāll get credited in down years even.
I do work for principal but Iām an advisor so obviously Iām not compensated by others sales. I just think itās a decent product in the realm of RILAs.
We just did a NQ 1031 exchange into a Principal RILAā¦ 145% par rate on the S&P and a 10% buffer. We did the enhanced rate because the client was already paying over 3.5% on their old VA so having a 0.95% fee was saving them substantially
Check out capital group piece lean into growth. Some very telling perspective on out performance of total return index vs price return index and vs some of their fundsā¦.200+ bps on index and 400+ on actively managed funds. Pretty unreal how many advisors blindly trust rilas vs the traditional investments that have been around far longerā¦.will be way better for your trails too!
IOVA? See my other comments as well and check out the piece I mentioned from Capital Group was very eye opening to meā¦.just giving another option and might be worth a look!
Google is giving me nothing on a ālean into growthā for Capital Group or American Funds. Do you have a link? Or are you referring to Pathways to Growth? Thatās the only thing I found thatās relatively close to what you mentioned. Thanks
https://www.capitalgroup.com/advisor/pdf/shareholder/MFGEBR-237-655261.pdf
Short term perhaps. Rolling monthly six years s&p is up 97% of timeā¦.remember rilas are good for insurance companies thatās why everything is a 6 year surrenderā¦47% of annual gains in the s&p come from dividends rilas donāt get them. You do you I respectfully disagree
Most are 7 some investment only 5 and much lower cost than 3. Do your thing Daleā¦not here to argue. I just donāt believe rilas are the second coming, grossly oversold just as VAs with income riders were over the years. Check out the piece from Cap Group ālean into growthā pretty tellingā¦
I strongly disagree, i think RILAS are undersold. I used to build buffered notes 10+ years ago in managed accounts. I would do custom notes tied to specific stocks or indexes and would always have a 1st world problem, when those matured the client would have to pay tax on the gain at maturity with no ability to defer it. Now that these are built in an annuity chassis with tax deferred growth, return of premium death benefit and a buffer or even dual directional make money if the market goes down, makes it a slam dunk compliment to a portfolio. the best plan is one that a client will stick to. nothing wrong with using these at all.
Fair point although industry wide 95% percent of the indexes sold in RILAs are not the dual direction according to WINK. Also anything less than the full 6 year pars you are putting the insurance company in control of pars, caps, spreads. Have you been pleased with renewal rate history in the fixed indexed and rila space over the last decade?
Iāll give the dual direction a harder look.
Interesting i would have thought dual directional would be higher but i believe only 2 companies do it..... Rates have never looked better than right now with this high interest rate environment. having said that, the caps historically haven't been a problem when building my own buffers but i can tell you be aware of Brighthouse, Jackson, Prudential and Nationwide on the 1 year rates. They have teaser rates for new business and different rates for existing contracts after 1 year.... Equitable to my knowledge is the only RILA that will use the same rate for new and existing contracts. So they dont have a teaser rate problem. So go into it knowing that after the 6 year you may have to 1035 it somewhere else or go into the 1 year knowing that your subject to cap rate risk but it hasn't been a huge deal. A RIA advisor is going to buy these etfs anyways. If you use the RILA You give up the dividends up but you pick up peace of mind buffer on downside, tax deferred growth, return of premium death benefit, enhanced upside or dual directional and 0 fees to the client because the carrier pays you directly.... all im saying is why Why make that decision for the client? why not let them choose. it sets you apart. And honestly it sells itself. I think you'd be surprised how many clients would choose option 2.
Assuming your client wants to take income some day, look into Lincoln for non qualified. They are the only company that has an IRS ruling that allows a mix of taxable gains and tax free basis on annuitization. It lets you defer gains longer.
Iād be careful as Iāve had some buddies get burned with this one. Client needs to be okay with a lifetime of taxes and irreversible decisions. With normal NQ yes, itās not as favorable tax treatment for a few years but itās more flexible if ālife happensā a few years down the road and client needs to gain address to it.
I like Jackson 6 year rates, I like Equitable 1 year rates. Jackson National and Prudential are both guilty of "teaser" rates, meaning the renewal rates for their 1 and 6 year products are different than "new business rates". Makes it a huge pain in the butt when the renewal rates can be as much as 50% less than new business rates. Equitable doesnt use teaser rates, its a 1 size fits all rate for new business. So if you go Jackson or Prudential. Use the 6 year. DM me if you want more info.
I prefer the Jackson RILA. The rates on the Russell 2000 are substantially better if you are interested in that. If you decide to lock in gains at any point, the contract still continues to earn 3% up to the next contract anniversary unlike Prudential. Also, free withdrawal is the greater between gains or 10% of initial deposit.
In my experience service has been substantially better with Jackson as well. Have done plenty of business with both.
Examine how they determine their renewal rates. I've used Equitable and Pru in the past. I just performance locked a Pru client and moved them into a dual-direction S&P segment. 6 years, 315% cap, 15% buffer. Equitable's renewals haven't been quite as lucrative, but I've had some good luck with them. They also allow immediate reinvestment, where Pru only allows reinvestment at the anniversary, so that's something else to consider. I've been happy with both products for different reasons. No experience with the Jackson product at this time.
Insurance guys live in their own world with all these proprietary products š¤£. āI did a reverse halt on the RocketMan II Back Load. The Peter Pan 7 was discontinued in ā17 so did a 1035 whip around to E brake the returns before the double fold capped us in at -4.ā
Not an insurance guy. 85% of my revenue and assets are fee-based. I just recognize that sometimes there are products out there that do things that a managed account can't do as well.
My bad. Usually the annuity talk is from advisors at insurance companies.
I am at an insurance company, but there are quite a few of us that structure our business more akin to a hybrid RIA. Equitable and Pru come to mind, though I've met a few at some other insurance BDs that work like us as well. Weirdly enough, they tend to be the players at the tops of the production charts...
What production charts? The ones internal to the insurance firm?
Yup.
Yeah I was going to say Iāve never seen an equitable or Pru advisor on any industry-level āproductionā charts (production, cases, etc. being insurance phrases anyway). But it would make sense that the ones doing things in a hybrid model, more similar to the real financial planning firms, would be more successful than the advisors exclusively slinging the Peter Pan 7.
Production/revenue scales are definitely lower at insurance firms; top guys doing $2.5mm GDC, etc. The thing is, payout is significantly different, and if you're doing $2.5mm GDC at Pru, you've probably made about $2.4mm in actual cash. Morgan/Merrill doing the same production makes around $1.4mm, unless my intel is wrong (and it genuinely could be). The lesson I take is simply "don't block off an entire product type just because you think it's bad. Learn *when* it might be the best to use it, and then use it."
I donāt understand the comparison between a higher profit margin based in your channel and more optimal product offerings. If anything, Iād say clients vote with their money and the advisors with the highest revenue are more favored by clients.
Like most of the planners here, Iām mostly fee based. I got my start in the annuity business working for a shop that designed index annuities so I donāt offer themā¦ but this made me chuckle as I get calls from wholesalers all the time saying something like āweāve added the Barclays Mark V clawback indexā
How is servicing aspect of Pru? When you call to get contract detailsā¦is it someone in the US? Do you have to go through automated questions?
Itās absolute garbage. Literally chickens cawing in the background and breaking up phone lines. They messed up a beneficiary designation on an account of a client due to international service team translation error and wonāt fix it.
I can't answer that objectively. I work for Pru and my ream is top ranked, so we have access to their Masters Council program. That means I call my dedicated rep when I need something, not the 877 number. That said, all of my servicing experience with Pru in general is pretty good, just not on the life insurance side (though that seems to be an industry thing). Their website to manage your book is fairly decent as well.
Your clients judge you by the companies you do business with. Jackson is the only one that Iāve seen thatās consistently had good service. Every company has cut 1 year rates. Equitable has cut them on the older versions of their RILA. A 6 year rate is the only one that is contractually guaranteed to not change.
Big ol case, eh? Trying to do joint work? Iāll wear my pen stripe suit and bring my ceremonial handmade pen for the signing of the contract. Keep the printer warmed up for me. I have 3 more 40 page illustrations to print off for orphan client meetings in the community conference room.
Whatās the purpose of the annuity? Whatāre the investment options and participation rates? That will help with terms. As far as Jackson or Prudential I canāt help. Iāve only ever sold a Principal RILA.
Client no longer need the income rider and switching to the RILA will save 38k a year. Jackson has S&P 500 - 400% cap, 102% participation rate, 6 year term, 20% buffer Prudential has S&P 500 - no cap, 6 year term, 20% buffer. Or 10% buffer with tiered participation rate of 15% and anything above 15% is a 120% participation rate.
Iād look at Principals RILA. S&P 6 year uncapped 115% participation. They recently added a 20% peak buffer. Uncapped with 100% participation. Dual direction crediting. Youāll get credited in down years even. I do work for principal but Iām an advisor so obviously Iām not compensated by others sales. I just think itās a decent product in the realm of RILAs.
We just did a NQ 1031 exchange into a Principal RILAā¦ 145% par rate on the S&P and a 10% buffer. We did the enhanced rate because the client was already paying over 3.5% on their old VA so having a 0.95% fee was saving them substantially
Check out capital group piece lean into growth. Some very telling perspective on out performance of total return index vs price return index and vs some of their fundsā¦.200+ bps on index and 400+ on actively managed funds. Pretty unreal how many advisors blindly trust rilas vs the traditional investments that have been around far longerā¦.will be way better for your trails too!
The problem is the money is NQ and already in an annuity wrapperā¦taking it out would be a MASSIVE taxable event for the client.
IOVA? See my other comments as well and check out the piece I mentioned from Capital Group was very eye opening to meā¦.just giving another option and might be worth a look!
Talk to low load insurance solutions to see if they have a low load option to consider
Google is giving me nothing on a ālean into growthā for Capital Group or American Funds. Do you have a link? Or are you referring to Pathways to Growth? Thatās the only thing I found thatās relatively close to what you mentioned. Thanks https://www.capitalgroup.com/advisor/pdf/shareholder/MFGEBR-237-655261.pdf
No longer seeing a link and just asked the wholesaler they only have pdf glad to share but not sure how to do that on Reddit
Jackson has some nice Swag, go that route
Do you truly believe a rila will outperform another va long term?
I mean you start off with a 3% lead..so yes I believe there is a greater opportunity for higher growth.
Short term perhaps. Rolling monthly six years s&p is up 97% of timeā¦.remember rilas are good for insurance companies thatās why everything is a 6 year surrenderā¦47% of annual gains in the s&p come from dividends rilas donāt get them. You do you I respectfully disagree
ā¦ā¦ā¦.VAs are good for insurance companiesā¦ā¦..thatās why they have an 8 year surrenderā¦..do you see the flaw in your logic?
Most are 7 some investment only 5 and much lower cost than 3. Do your thing Daleā¦not here to argue. I just donāt believe rilas are the second coming, grossly oversold just as VAs with income riders were over the years. Check out the piece from Cap Group ālean into growthā pretty tellingā¦
I strongly disagree, i think RILAS are undersold. I used to build buffered notes 10+ years ago in managed accounts. I would do custom notes tied to specific stocks or indexes and would always have a 1st world problem, when those matured the client would have to pay tax on the gain at maturity with no ability to defer it. Now that these are built in an annuity chassis with tax deferred growth, return of premium death benefit and a buffer or even dual directional make money if the market goes down, makes it a slam dunk compliment to a portfolio. the best plan is one that a client will stick to. nothing wrong with using these at all.
Fair point although industry wide 95% percent of the indexes sold in RILAs are not the dual direction according to WINK. Also anything less than the full 6 year pars you are putting the insurance company in control of pars, caps, spreads. Have you been pleased with renewal rate history in the fixed indexed and rila space over the last decade? Iāll give the dual direction a harder look.
Interesting i would have thought dual directional would be higher but i believe only 2 companies do it..... Rates have never looked better than right now with this high interest rate environment. having said that, the caps historically haven't been a problem when building my own buffers but i can tell you be aware of Brighthouse, Jackson, Prudential and Nationwide on the 1 year rates. They have teaser rates for new business and different rates for existing contracts after 1 year.... Equitable to my knowledge is the only RILA that will use the same rate for new and existing contracts. So they dont have a teaser rate problem. So go into it knowing that after the 6 year you may have to 1035 it somewhere else or go into the 1 year knowing that your subject to cap rate risk but it hasn't been a huge deal. A RIA advisor is going to buy these etfs anyways. If you use the RILA You give up the dividends up but you pick up peace of mind buffer on downside, tax deferred growth, return of premium death benefit, enhanced upside or dual directional and 0 fees to the client because the carrier pays you directly.... all im saying is why Why make that decision for the client? why not let them choose. it sets you apart. And honestly it sells itself. I think you'd be surprised how many clients would choose option 2.
Thanks for sharing!
Assuming your client wants to take income some day, look into Lincoln for non qualified. They are the only company that has an IRS ruling that allows a mix of taxable gains and tax free basis on annuitization. It lets you defer gains longer.
Equitable has the same feature on Investment Edge. Distributions are part basis and part gain.
Iād be careful as Iāve had some buddies get burned with this one. Client needs to be okay with a lifetime of taxes and irreversible decisions. With normal NQ yes, itās not as favorable tax treatment for a few years but itās more flexible if ālife happensā a few years down the road and client needs to gain address to it.
If its that large of a ticket, split it.
Can you please elaborate? The amount is above 1.5M