Jackson National Life Insurance wanted to expand its reach beyond the financial advisers it was already working with. The creation of its variable annuity, Elite Access, did just that.

Last year, 17,700 advisers helped sell $5.1 billion of Elite Access, said Bill Burrow, Jackson’s senior vice president of national sales development. “Forty percent did not sell our standard death benefit and living benefit annuities,” he said Thursday at the Insured Retirement Institute’s marketing summit in Nation Harbor, Md. “It accomplished its mission of helping us grow the pie and get to a different type of adviser.”

Those advisers are selling investment-only variable annuities, which is a growing market, Burrow said. Education and training are essential in order to have a meaningful conversation with advisers about IOVAs, said Mike Maghini, managing director, head of insurance and annuities at Merrill Lynch Wealth Management.  

“We really realized that 100% of our advisers are in the investment business,” he said. “Not all of them are in the income business, not all of them are in the retirement business and not all of them are in the tax deferred business.”

Education is critical

Training started five months before the March 5, 2012, launch of Elite Access. Jackson required its wholesalers to receive an investment-related designation, Burrow said, and three separate times the entire sales team was taken out of the field to learn about various investment management concepts.

The following year, wholesalers completed 22 hours of online training, Burrow said. Today, Jackson holds monthly conference calls with its sales team and next month will launch another investment management program, he said. It’s important that advisers not only understand the meaning of various investment terms and products, but how they fit into a client’s portfolio, Burrow said.

Personalization matters when it comes to investing, said John Escario, vice president of T. Rowe Price’s investment products group. He likened it to his personal TV/movie subscriptions, which include cable, Hulu, Netflix and Amazon Prime. “I can basically watch what I want, where I want, how I want,” he said. “The same holds true with an investment.

“Different advisers, different clients have different needs,” Escario added.

The future of IOVAs

While technological advances have removed the human element from much of our daily lives, that’s not the case when it comes to retirement, Maghini said. “We’re a high-touch, personalized business,” he said. “Our advisers have incredible value.”

IOVAs won’t overcome variable annuity guarantees, Burrow said, but there is room to grow. If a client wants a guarantee, those products exist, he said, and IOVAs allow for a more robust investment platform. “We have great growth ahead of us,” Burrow said.

IOVAs help with risk management, Escario said. They allow advisers and clients “to be flexible in an environment where you’re uncertain where things may be headed,” he said, citing that Congress has made 5,000 changes to the Tax Code since 2001.

The industry is constantly shifting, Maghini said, and advisers need to evolve with it. “Our business is dynamic, it’s not static,” he said. “It is driven by consumer demands and the economy and regulations.

“It will continue to change, and we need to change and evolve with it, which means we need to take some risks.” 

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