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The growth of an international market for trading Chinese currency and renminbi-denominated bonds will help institutional investors that need alternatives to the U.S. dollar and the euro, according to executives at US-based Principal Global Investors, a unit of the Principal Financial Group.

“The world needs multiple reserve currencies to allow diversification,” Jim McCaughan, Principal’s CEO, told Investments & Pensions Asia. “For investors who have global aggregate portfolios or diversified global bond portfolios, having the RMB as an extra source of diversification is really important.”  

Sovereign reserve funds in particular regard the RMB, which first became available as an investment currency in July 2010, as a potential alternative reserve currency, McCaughan said.

In 2011, the Chinese government introduced a yield curve by issuing two-, three-, five-, seven- and 10-year bonds, with China Development Bank in early January selling the first 15-year offshore yuan bond. The bank, China’s biggest bond issuer after the Ministry of Finance, priced the bonds to yield 4.2%.

Asian reserve funds have been holding 20%-30% of their funds in euros to hedge the dollar. But they regard the euro as overvalued, despite the impact of the European debt crisis. Increasingly, they see the yuan is seen as source of diversification and potential growth.

When the RMB first became available to investors, it attracted a rush of money. Indeed, the high demand pushed yields downward. In 2011, the currency appreciated only 4.8%, which reduced demand and helped restore the balance between the yield curves of onshore and offshore yuan bonds. 

Meanwhile, Hong Kong announced plans to help London become an offshore trading center for the yuan. The two financial centers will collaborate on clearing and settlement systems, market liquidity and development of new RMB-denominated products.

The RMB could help satisfy a demand for specialty high-yield bond investments among Asian pension funds, said Andrea Muller, Principal’s chief executive for Asia. The region’s institutional investors want to diversify away from domestic fixed income “and into emerging market debt and equities across the region,” she said.

“There has also been growing interest in commercial real estate, in particular from government pension funds across the region,” she added. “We’ve seen an increased demand for niche products such as mortgage-backed securities, REITS and high-yield debt.” They are also buying property in Japan, Australia, Europe and the U.S., she said.

“Giddy” institutional investors, many of whom believe the Fed could announce another round of money printing as early as this month, are driving the January rally, according to TrimTabs.

Much of the year-to-date gain in U.S. stocks has occurred in overnight futures trading—a sign that demand is coming from institutions, said Trim Tabs executive vice president David Santschi. “It’s not the retail crowd that’s pumping up stock futures,” he said

Retail investors remain pessimistic, judging by fund flows. TrimTabs estimates that U.S. equity funds have received only $3.3 billion in fresh cash so far in January, which historically see strong inflows.

For all of 2011, $932 billion flowed into checking and savings accounts—almost eight times the $117 billion that TrimTabs estimates flowed into stock and bond mutual funds and exchange-traded funds during the year.

TrimTabs sees a political factor at work. “The Fed will be pulling out all the stops to ensure President Obama’s re-election,” said Santschi. “If the Fed doesn’t hint at or announce plans to print more money, equity investors could be badly disappointed.”

Other possible signs that institutions are bullish: 

• Short interest at New York Stock Exchange member firms fell 10.5% in December to the second-lowest level in the past two years.

• The put/call ratio averaged only 0.81 on the past five trading days, the lowest five-day average since July 2011.
• The VIX fell to 20.5 on January 12, its lowest level since July 2011.

• 42% of the hedge funds surveyed by TrimTabs and BarclayHedge in December bullish on the S&P 500, while 30% were bearish. It was the highest level of optimism since last July.

• 51.1% of newsletter writers are bullish, according to Investors Intelligence. That was the highest level of optimism since the market peak of April 2011.  

• Bank of America’s survey of global fund managers found that asset allocators are more bullish on U.S. stocks than at any time since April 2010.

© 2012 RIJ Publishing LLC. All rights reserved.

Just as 90% of all Frenchmen consider themselves to be above-average lovers, about twice as many advisors who call themselves “planners” offer planning services.

Registered reps who call themselves financial planners often merely recommend investments for accumulation, according to Cerulli Associates. The research firm suggested that the titles that brokerage employees use don’t necessarily reflect their skills.

“Without industry-wide consistency in the nomenclature used by advisors, lack of clarity about what services an advisor actually offers investors is likely to continue,” said Cerulli’s seventh Quantitative Update: Advisor Metrics, an annual sourcebook for data and analysis on advisors’ practices.

Although more than half (59%) of advisors perceive themselves as providing a level of service that merits the title of “financial planner,” Cerulli’s research showed, 56% are better categorized as “investment planners.” Only about 30% offer planning services.

In a survey, Cerulli asked advisors to classify their practices based on their perception of the services they offer. Cerulli then reviewed the actual services they offered (data also garnered through surveys) and the client base of each advisor to see which classification matched the advisor’s actual practice.

Many advisor practices “offer some of the basic elements of financial planning, but focus their efforts nearly exclusively on asset accumulation strategies,” Cerulli said in a release.

“Firms have encouraged their advisors to expand their advice relationships with clients, [but] advisors tend to overestimate the degree to which they are involved in the planning process.

“The movement to extend advice services is likely being accelerated by turbulent markets, as advisors who base their value to investors on investment performance have suffered more than those with broad advice relationships,” the release said. 

Yet most investors don’t need comprehensive planning, Cerulli pointed out. Clients with $500K to $2 million dollars in investable assets represent the largest pool of retail assets, but have relatively straightforward service requirements. Relatively few retail clients need estate, charitable, business planning, or private banking services.

Milliman opens office in Dusseldorf

Milliman Inc., the global consulting and actuarial firm, has opened a new office in Dusseldorf, Germany, to complement its existing office in Munich, according to a news release.

The Dusseldorf office is headed by Michael Leitschkis, who combines a consultancy background with experience as head of Modelling Life and Health at a major German insurance group. He is a member of the German Actuarial Union (DAV) and a lecturer of the German Actuarial Academy (DAA) as well as the European Actuarial Academy (EAA), lecturing on risk modelling within the CERA education framework.

The consultants in the new office will operate as part of the European Milliman team, which includes 250 consultants. Their main services will focus on risk modelling and ERM (Enterprise Risk Management), implementation of Solvency II and ALM (Asset Liability Management).

The new address is Milliman GmbH, Speditionstrasse 21, 40221 Dusseldorf. Tel. +49-211-88231-595; Fax. +49-211-88231-520.

Few GenXers on track for secure retirement: IRI

Only one-third of GenXers are at least very confident of having enough money to live comfortably during retirement, cover their medical expenses, and pay for their children’s higher education, according to “Retirement Readiness of Generation X,” a new report from the Insured Retirement Institute.

The research was conducted by means of telephone interviews with 802 adult Americans ages 30-49. The survey was conducted by Woelfel Research, Inc.

Just 41% of GenXers have tried to figure out how much money they will ultimately need to save, the survey showed. Among those who have saved, half have amassed less than $100,000.

Of those who pinpointed an anticipated retirement age, the average age was 64, indicating an average retirement period of more than 20 years.

Amid the recession, 15% of GenXers have made early withdrawals from their 401(k) plans, 23% stopped contributing to their retirement accounts, and 22% stopped contributing to college savings plans. Approximately 21% of older GenXers and younger Boomers in this group needed to dip into their retirement savings plans in the past year.

Single GenXers, women and those on the cusp of the Boomer Generation are in particular need of guidance in planning for retirement. 54% of female GenXers rated themselves as having little to no investment knowledge; this compares to 37% of male GenXers.

Only 24% of single GenXers were at least very confident that they would have enough savings to fund their lifetime retirement needs, compared to 40% of married GenXers.

On the other end of the scale, 35% of single GenXers expressed little to no confidence about having enough money for their retirement, compared to 20% of married GenXers.

Presently, 37% of GenXers have consulted a financial advisor. Among single GenXers, this figure is 20%. IRI defines Generation X as Americans born from 1965 through 1981, inclusive.

Generation X, as a group, is educated (one third have at least a Bachelor’s degree), own their own homes (at least 70% of married couples), and work in professional occupations (more than 40%).

FPA and AFCPE to leverage ‘synergistic strengths’ 

The Financial Planning Association (FPA) and the Association for Financial Counseling and Planning Education (AFCPE) will collaborate on “a number of initiatives designed to leverage the organizations’ natural synergistic strengths and resources,” the two organizations announced.

The FPA is the nation’s largest membership group for personal financial planning experts and AFCPE is dedicated to educating, training and certifying financial counselors and educators. The primary areas of collaboration will include:

• Supporting and developing the complementary disciplines and professional specialties of financial counseling and financial planning.

• Providing specially designed options to FPA members who wish to obtain Accredited Financial Counselors (AFC) and Certified Housing Counselors (CHC) certification, and to AFCPE counselors who are seeking membership within FPA and explore opportunities to work with Certified Financial Planner members of FPA

• Helping enhance personal finance research and education programming, including expanded opportunities for FPA members and AFCPE certified counselors to gain Continuing Education
• Developing communities of practice between FPA and AFCPE memberships both nationally and regionally  
• Expanding educational sessions on key personal finance topics at the organizations’ respective conferences.

Fidelity’s global investing platform adds five countries and currencies

Fidelity Investments said it will add five additional countries and currencies to its online international investing platform, enabling investors to trade international stocks and exchange foreign currencies in 17 major markets.

All of Fidelity’s retail brokerage customers can now register online to trade directly in international markets. Previously, only Fidelity’s active traders and high-net-worth investors could do so.

The new countries and currencies available to Fidelity’s retail investors are:

• Mexico; Peso (MXN)
• New Zealand; New Zealand Dollar (NZD)
• Singapore; Singapore Dollar (SGD)
• Sweden; Krona (SEK)
• Switzerland; Swiss Franc (CHF)

Fidelity’s online international investing platform was launched in 2009.  In addition to direct access to 17 foreign markets and 13 currencies, Fidelity customers also can benefit from the more than 1,400 mutual funds and 250 ETFs with international securities exposure available on Fidelity.com/InternationalTrading. From 2010 to 2011, the number of international equity executions on Fidelity.com increased 89%.

Before the expansion, 12 countries were available on Fidelity’s brokerage platform: Australia, Belgium, Canada, France, Germany, Hong Kong, Italy, Japan, the Netherlands, Norway, Portugal and the United Kingdom, with trading in eight currencies, the Australian Dollar, British Pound, Canadian Dollar, Euro, Hong Kong Dollar, Japanese Yen, Norwegian Krone and U.S. Dollar.

Swiss Re names Group CEP

Swiss Re’s board of directors has appointed Michel M. Liès, a veteran Swiss Re executive, as the new Group Chief Executive Officer, effective February 1, 2012. He succeeds Stefan Lippe, who announced his departure last December.

Born in France, Liès is a citizen of Luxembourg. After obtaining a mathematics degree from the Swiss Federal Institute of Technology in Zurich, he became chief financial officer of a ceramics company in Brazil. He joined Swiss Re in 1978, focusing on the Latin American Life & Health markets. In 1994 he was named head of Swiss Re Iberia & Latin America Property & Casualty and starting in 1998 he served as a member of the Executive Board and head of the Latin American Division.

From 2000 through 2005, Liès led Swiss Re’s Europe Division, after which he became global head of Client Markets and a member of the Executive Committee. In 2010, he was named chairman of Global Partnerships.

The Board also announced that Moses Ojeisekhoba will join Swiss Re as CEO Reinsurance Asia. The chairman of the Swiss Re board is Walter B. Kielholz. 

Putnam names two to global consultant relations team

Charlotte Walsh and Greg Weissman have joined the Global Institutional Management Consultant Relations team at Putnam Investments. The two will be based in Chicago and Boston, respectively.

Along with current team members Keith Thomas in London, Anne Lundberg in Chicago, and two Boston-based associates, they will report to Joseph Phoenix, head of Putnam Global Institutional Management. The new team will serve the needs of institutional asset management consultants worldwide.

Walsh joins Putnam from Ranieri Partners, where she was managing director, focusing on direct sales and consultant relations. A CFA charter holder, she also worked at Allegiant Asset Management, Oppenheimer Capital, and Banc One Investment Advisors/JP Morgan Asset Management, as Stratford Advisory Group and William M. Mercer Investment Consulting.  She attended Northwestern University.

Gregory Weissman was most recently senior vice president, director of consultant relations, Old Mutual Asset Management. Prior to that, he was director, institutional sales for Cowen & Company. Weissman has also held senior roles at Pacific Crest Securities and Jefferies & Company. He is a graduate of Southern Methodist University,
Edwin Cox School for Business.

DTCC releases report on 2011 and December annuity product activity

The Depository Trust & Clearing Corporation (DTCC) Insurance & Retirement Services (I&RS) has released full-year and December information on activity in the market for annuity products from its Analytic Reporting for Annuities online information service, which leverages data from the transactions that DTCC processes for the industry. Analytic Reporting for Annuities is a service offering of National Securities Clearing Corporation, a DTCC subsidiary.

• Inflows processed by DTCC in 2011 totaled over $90 billion.
• DTCC processed nearly 45 million transactions categorized as inflows and out flows in 2011.
• Net flows in 2011 totaled almost $24 billion.
• Inflows for all annuity types processed in December increased nearly 13%, or over $860 million, to $7.8 billion from $6.9 billion in November.
• Subtracting out flows from inflows, net cash flows decreased 2.5% to $1.84 billion in December from $1.9 billion in November.
• The top 10 insurance companies accounted for over 69% of all inflows processed in December and over 68% of all inflows processed in 2011.
• Five hundred sixty one (561) annuity products saw positive net flows in December, while 2,264 annuity products saw negative net flows, where the amount redeemed exceeded the amount invested.
• For the full year, 700 annuity products had positive net flows and 2,450 experienced negative net flows.

The overall trend in inflows has been slightly down for the year, while the trend in net flows has been slightly up.

Transactions processed by DTCC show an increasing percentage of inflows being directed into IRA accounts in 2011, and a decreasing percentage of inflows directed into non-qualified accounts.

Non-qualified accounts are receiving less than 40% of cash flows. After remaining relatively flat for the past several months inflows into 401(k) plans jumped from $392 million in November to almost $749 million in December.

Looking at the net cash flow (subtracting out flows from inflows) distribution displays the greater persistence, or “stickiness,” of investments into qualified plan accounts. In 2011 regular IRA accounts took the lion’s share of positive net flows with 77%. 401(k) plans attracted 13%, and non-qualified accounts attracted only slightly less than 6% of positive net flows, far from the 39% of inflows going into these accounts.

In August 2011, DTCC joined forces with the Retirement Income Industry Association (RIIA) to analyze cash flows by RIIA-defined broker/dealer distribution channels and product categories. For the six distribution channels defined by RIIA, the following are the percentages of inflows processed by the I&RS in December:

• Independent broker/dealers – 25%
• Wirehouses – 23%
• Regional broker/dealers – 15%
• Bank broker/dealers – 12%
• Insurance broker/dealers – 9%
• Others – 16%

DTCC, through its subsidiaries, provides clearance, settlement and information services for equities, corporate and municipal bonds, government and mortgage-backed securities, money market instruments and over-the-counter derivatives. It is also a leading processor of mutual funds and insurance transactions, linking funds and carriers with their distribution networks.

DTCC’s depository provides custody and asset servicing for more than 3.6 million securities issues from the United States and 121 other countries and territories, valued at US$36.5 trillion. In 2010, DTCC settled nearly US$1.66 quadrillion in securities transactions. DTCC has operating facilities and data centers in multiple locations in the United States and overseas.   

Personal financial stress affects employee performance and retirement savings, HR survey shows

A survey of employer-sponsored financial education initiatives shows that U.S. workers’ money worries are impacting their work performance and retirement savings plans.

The survey from the Society for Human Resource Management asked HR professionals key questions, including, “In the past 12 months, have employees been more likely to dip into their employer-sponsored retirement savings plans compared with previous years?” More than half—55%—of HR professionals agreed while 17% strongly agreed. A little less than a quarter, or 24%, disagreed, and three percent strongly disagreed.

When asked the impact of employees’ personal financial challenges upon work performance, roughly one in five—22%—of HR professionals cited a “large impact.” Sixty-one percent noted “some impact” while 16% responded, “slight impact.” Only two percent of HR professionals observed “no impact” upon workers.

“The source of money woes is unsurprising but the toll it’s taking on both workers and their employers, in addition to the persistence of the weak economy, are all troubling issues,” said Mark J. Schmit, Ph.D., SPHR, vice president of research at SHRM.

A closer look at the impact on work performance shows that:

• 47% of HR professionals noticed employees’ struggle with their “ability to focus on work”;
• 46% noticed issues with “overall employee stress”;
• 26% observed a negative impact on “overall employee productivity”;
• 24% said money woes are leading to “employee absenteeism and tardiness”;
• 20% are concerned about “overall employee morale”;
• 12% noticed a negative impact on “overall employee health” ; and
• 7% said “working relationships with other employees” are the least impacted.

To understand what employer-sponsored financial education programs need to cover, the survey examined the sources of personal financial stress. Nearly half—49%—of HR professionals said employees are stressed by an “overall lack of monetary funds to cover their personal expenses.”

SHRM surveyed 458 randomly selected HR professionals from its membership.

Actuaries identify four national priorities

The American Academy of Actuaries has released what it considers key policy priorities needed to restore the nation’s fiscal health and financial security, saying it “hopes the president will place these priorities high on his policy agenda this year. There are mounting risks facing important public programs and private systems critical to the nation’s retirement security and financial strength, and the actuaries urge all policymakers at the joint session of Congress to work together toward viable and sustainable solutions.

“Failure to act to address these significant financial problems makes them more difficult to successfully manage and mitigate,” said Dave Sandberg, president of the American Academy of Actuaries.

Priority: Achieve long-term sustainability of the Social Security and Medicare programs

The actuaries believe that recent efforts to curb deficits and address the nation’s fiscal challenges have been missed opportunities to restore both programs’ financial viability and provide security to future generations of retired Americans.

Specifically regarding Social Security, the actuaries renew their recommendation to policymakers to restore actuarial balance to the program by including an increase in the retirement age in any reform measure. Life expectancy improvements have increased the program’s payout of benefits and system costs. An increase in the retirement age, however, would help stem this cost growth and lead to a more financially sustainable system.

Priority: Achieve retirement security through new retirement framework

Policymakers also must address the challenges of longevity risk, inflation risk, investment risk, and their effects on retirement security. Actuaries had considerable concerns regarding adverse selection and sustainability with the Community Living Assistance Services and Supports (CLASS) program adopted as part of the Affordable Care Act, and, in 2011 the Department of Health and Human Services indicated that it would not implement the program. A renewed focus on meeting the long-term care needs of an aging population is needed. Providing consumers with greater financing options for long-term care services and supports should also be a part of any new retirement framework.

Priority: Achieve goals of health reform

The American Academy of Actuaries believes curbing health care spending growth, reducing the number of uninsured, increasing access to affordable health coverage, and improving health care quality are fundamental to providing health security to all Americans.

Priority: Successfully manage financial systemic risk 

Actuaries believe that regulatory systems will better anticipate future systemic risk by incorporating sound risk management principles. The new regulatory regimes should employ the appropriate oversight, expertise and accountability necessary to mitigate the effects of risks that could threaten the stability of the nation’s financial system.

The American Academy of Actuaries, which has 17,000 members, assists public policymakers on all levels and sets qualification, practice, and professionalism standards for actuaries in the United States.

© 2012 RIJ Publishing LLC. All rights reserved

For the fourth quarter of 2011, the John Hancock Investor Sentiment Index score is +15, an improvement from the annual low of +10 measured in the year’s third quarter.  

The fourth quarter survey was conducted in late November through early December of 2011. The John Hancock Investor Sentiment Index is a quarterly poll of approximately 1,000 investors, and reflects the percentage of those who say they believe it is a “good” or “very good” time to invest, minus those who feel the opposite.

Many of those surveyed “feel better about investing in retirement vehicles, like 401(k)s and IRAs,” according to a release. “Three out of four investors said they believe that now is a good or very good time to be investing in retirement products such as 401(k) plans and IRAs (73% each). Both of these figures represent meaningful increases over last quarter’s lows (66% for 401(k)s and 67% for IRAs in Q3).”

“Investors are dealing with market uncertainty by further diversifying their investments,” observed Bill Cheney, chief economist for John Hancock. “Half of the investors surveyed say it is a good time to invest in balanced mutual funds, and about three-quarters say they plan to invest in mutual funds in 2012.”

More than half of the investors surveyed said they expect to be in a better position financially two years from now compared with today. A little more than a third of investors think they are in a better financial position today compared with two years ago; 41% said they are in about the same position, and 25% said they are worse off.

Three-quarters of American investors (72%) believed that consumer spending this holiday season would help the U.S. economy and stock market.  Most (61%) planned to spend the same amount of money on the holidays as they did in 2010, though 25% said they planned to spend less. About a third (31%) said they planned to cut back on gifts to friends and colleagues, while 83% planned to spend the same amount or more on family.

Most (65%) believe that fewer than 10% of Americans actually make and keep New Year’s resolutions. However, those who are employed say that saving for retirement is their top financial priority for 2012. More than a quarter (27%) intend to trim household budgets and reduce debt.

Financial New Year’s resolutions appear directly related to investors’ primary concerns for the new year ahead, which include declining investment values (37 percent) and not being able to accumulate enough savings for retirement (18 percent.)

Other findings for Q4 2011 include:

• Investors continue to think long-term (95%) and are focused on savings (90%).
• A greater share of investors (62%, compared to 53% in Q3) feel that now is a bad or very bad time to hold cash in the form of CDs or money market funds.   
• The national debt (63%) and the cost of healthcare (61%) remain as issues investors are most concerned about.  Consistent with Q3 results, more than half (54%) say they are highly concerned about the unemployment rate.
• Just one in three (37%) are very concerned about oil and gas prices, compared to 62% who worried about them in the second quarter of 2011.
• Only 20% of investors feel that gold will perform the best in the coming six months, compared to 32% who felt gold would outperform other investment types in the third quarter.

John Hancock’s Investor Sentiment Survey is a quarterly poll of 1,001 investors with household incomes of at least $75,000 and assets of $100,000 or more. Mathew Greenwald & Associates conducted the survey in November and December 2011.    

Cerulli projects that in 2013 the wirehouse channel will remain the largest distribution channel despite an anticipated decline of its share of assets under management to 35% in 2013 from 43% in 2010. 

Wirehouses were hurt by the 2008 bear market and by their perceived roles in the financial crisis, Cerulli’s Bing Waldert said. While the financial advisor industry grew from to $11.2 trillion in 2010 from just under $11 trillion in 2007, wirehouse assets dropped to $4.8 trillion from $5.5 trillion during that same period. 

Nonetheless, the four wirehouses (Bank of America/Merrill Lynch, Morgan Stanley Smith Barney, UBS, and Wells Fargo Advisors) remain the best capitalized in the asset management industry, and much of their recent market share loss came from planned attrition, as they forced out lower producing, less profitable advisors.

Wirehouses may be less concerned about market share than profitability, Cerulli noted. While scale is essential to these firms, they may want to serve only the most productive advisors. Morgan Stanley Smith Barney, for one, has publicly stated that it seeks a 20% profit margin from its wealth management business. Both Morgan Stanley Smith Barney and Bank of America/Merrill Lynch have trimmed middle management layers, aggressively cutting lower producing advisors.

“The future growth of wirehouses is through their largest advisor teams,” said Waldert. “Not via organic growth, but by supplementing these teams with junior advisors in order to free the principal advisors to continue their focus on business development.”

He warned, however, “It must be understood where these advisors will come from if these firms are not successfully hiring new advisors into the industry. Second, given the number of flexible options for an advisor, any cost-cutting in the name of profits that affects these advisors’ businesses could cause them to leave the firm if they feel that they are not being adequately supported.” 

© 2012 RIJ Publishing LLC. All rights reserved.

When asked to comment on Warren Buffett’s now-famous call for the wealthy to pay more taxes and give more to charity, 49% of U.S. millionaires agreed but said they’re not in Buffett’s league, 29% said Buffett was wrong, and 22% agreed.

Those statistics were among the findings of the eighth annual Wealth and Values Survey by PNC Wealth Management, a unit of The PNC Financial Services Group, Inc.  

Despite the nation’s financial troubles, the number of millionaires who agree or strongly agree with the statement, “I have an obligation to give back to my community,” remains at 59%, the same number as in 2008.

To improve the national economy, 31% of millionaires would “reduce taxes on individuals and businesses,” while 20% support raising taxes on the wealthy, 15% would reduce the costs of Social Security, Medicare and/or Medicaid, 15% would reduce the defense budget, and 10% would provide new government stimulus by the government.  

The number of millionaires concerned about their ability to give to charities has declined to 11% from 20 percent in 2008, according to the survey of 555 Americans with assets of $1 million or more. 

The survey showed that 22% intend to cut back on charitable giving, while 46% plan no change and 21% plan to increase their giving.

In addition, 83% believe that investment in private business and industry is the best way to improve society. At the same time, 70% feel a responsibility to help the less fortunate and 64% believe they should give “substantial sums” to charities to improve society.

The number who donated between $25,000 and $999,000 to charity doubled in 2010, to 24%, from 12% in 2008. 

Other findings in the Wealth and Values Survey by PNC, which is among the nation’s top 10 bank-owned wealth management firms, also revealed insights about the following issues:

• Greta Garbo syndrome: 65% say they “want to be left alone by politicians” to enjoy their earned wealth however they choose, and 80% view reinvestment as the key to progress.
• Institutional dysfunction: 76% feel that the U.S. government has serious flaws in how it works, 85% say the U.S. political system has serious flaws, and 47% believe the U.S. financial system is flawed.
• Response to higher taxes: If taxes increase, nearly four in 10 millionaires would “change their investment strategy” and one in four would give less to charity. Thirteen percent would work less, 7% would work harder, while 41% would not change anything.
• Bearish on the future: 71% of millionaires believe they are “much better off compared to parents at this same age.” Only 10% believe their children will be able to say the same when they are older.   

Survey Methodology

The Wealth and Values Survey was commissioned by PNC to identify attitudes about wealth among high-net-worth individuals, how it affects their lives and their needs in managing wealth. Artemis Strategy Group conducted the online survey from September 15 to October 11, 2011.

Jefferson National completes management buyout  

Jefferson National Financial has completed an $83 million management buyout financed by Financial Partners Fund (a unit of Citi Capital Advisors), The Stephens Group and private investor Eric Schwartz. The buyout was led by Mitchell H. Caplan, Jefferson National’s CEO.   

The company, which sells variable annuities to Registered Investment Advisors (RIAs) and fee-based advisors primarily as tax deferral vehicles, charges a flat insurance fee of $20 a month rather than commissions or expense ratios, and has taken advantage of the trend away from commission-based sales by advisors.

In a statement, Caplan said, “Starting in 2005, Jefferson National completely re-engineered the way variable annuities are bought and sold with a singular focus on serving fee-based advisors.

“Transforming the product with a proprietary technology platform, and rebuilding the distribution from the traditional wholesaler-driven model to a unique direct-marketing model, we have been able to dramatically reduce costs, create greater consumer value and become the leading variable annuity provider to the fee-based channel.”  

  A former CEO of E*Trade Financial, Caplan joined Jefferson National in 2010, reuniting with a leadership team that worked on Telebank, the nation’s first direct bank, and E*Trade. The team includes Laurence Greenberg, president of Jefferson National and former COO of Telebank, and David Lau, chief operating officer of Jefferson National. During their tenure, Telebank’s deposits grew from $200 million in 1994 to more than $8 billion in 2000. During Caplan’s tenure as CEO of E*Trade, revenue increased from less than $1 billion in 2003 to approximately $3 billion in 2006.

Donna MacFarland named CMO at Lincoln Financial

Lincoln Financial Group has named Donna MacFarland chief marketing officer of its Retirement Plan Services business. She will lead marketing initiatives, including the development of integrated business-to-business and business-to-consumer marketing strategies, and will manage Retirement Plan Services Participant Communications and Education offering.

MacFarland joined Lincoln in May 2010 as marketing director. She reports to Chuck Cornelio, president of Retirement Plan Services for Lincoln Financial.

Prior to joining Lincoln, MacFarland was founder and president of Symphonic Marketing, LLC, a marketing strategy consultancy focused on partnering with companies to drive growth through insights generation and marketing planning. Previously, she held senior brand management and marketing positions with The Vanguard Group, Inc., Merrill Lynch, Citibank, and Smith Barney.

Thomas Mann and Laura Dagan join F-Squared board 

Thomas F. Mann and Laura P. Dagan have joined the Board of Directors of F-Squared Investments, which currently has nearly $6 billion in assets under management or model manager agreements, the company said in a release.

Mann is a managing director and senior banker at Société Générale (SocGen) in New York. Dagan retired in 2010 as chairman of Dwight Asset Management Company, a fixed income and stable value asset management firm that invests on behalf of institutional clients including retirement funds and endowments.  

Mann and Dagan are the fourth and fifth members to join F-Squared’s board, which includes the firm’s president and CEO, Howard Present; vice chairman, George McClelland; and outside director Steve Ricci, the co-founder of OneLiberty Ventures and Special Partner at Flagship Ventures.

Mann, a Chartered Financial Analyst, graduated from State University of New York in 1972 and holds an MBA from New York University and a JD from Fordham Law School. He has also completed the Advanced Management Program at Harvard Business School. 

Dagan, a Chartered Financial Analyst, graduated from Bucknell University in 1974 and attended the Women’s Director Development Program at the Kellogg School of Management. She has also completed the Advanced Management program at Harvard Business School.

Jefferson National completes management buyout  

Jefferson National Financial has completed an $83 million management buyout financed by Financial Partners Fund (a unit of Citi Capital Advisors), The Stephens Group and private investor Eric Schwartz. The buyout was led by Mitchell H. Caplan, Jefferson National’s CEO.   

The company, which sells variable annuities to Registered Investment Advisors (RIAs) and fee-based advisors primarily as tax deferral vehicles, charges a flat insurance fee of $20 a month rather than commissions or expense ratios, and has taken advantage of the trend away from commission-based sales by advisors.

In a statement, Caplan said, “Starting in 2005, Jefferson National completely re-engineered the way variable annuities are bought and sold with a singular focus on serving fee-based advisors.

“Transforming the product with a proprietary technology platform, and rebuilding the distribution from the traditional wholesaler-driven model to a unique direct-marketing model, we have been able to dramatically reduce costs, create greater consumer value and become the leading variable annuity provider to the fee-based channel.”  

  A former CEO of E*Trade Financial, Caplan joined Jefferson National in 2010, reuniting with a leadership team that worked on Telebank, the nation’s first direct bank, and E*Trade. The team includes Laurence Greenberg, president of Jefferson National and former COO of Telebank, and David Lau, chief operating officer of Jefferson National. During their tenure, Telebank’s deposits grew from $200 million in 1994 to more than $8 billion in 2000. During Caplan’s tenure as CEO of E*Trade, revenue increased from less than $1 billion in 2003 to approximately $3 billion in 2006.

Donna MacFarland named CMO at Lincoln Financial

Lincoln Financial Group today has named Donna MacFarland chief marketing officer of its Retirement Plan Services business. She will lead marketing initiatives, including the development of integrated business-to-business and business-to-consumer marketing strategies, and will manage Retirement Plan Services Participant Communications and Education offering.

MacFarland joined Lincoln in May 2010 as marketing director. She reports to Chuck Cornelio, president of Retirement Plan Services for Lincoln Financial.

Prior to joining Lincoln, MacFarland was founder and president of Symphonic Marketing, LLC, a marketing strategy consultancy focused on partnering with companies to drive growth through insights generation and marketing planning. Previously, she held senior brand management and marketing positions with The Vanguard Group, Inc., Merrill Lynch, Citibank, and Smith Barney.

Thomas Mann and Laura Dagan join F-Squared board 

Thomas F. Mann and Laura P. Dagan have joined the Board of Directors of F-Squared Investments, which currently has nearly $6 billion in assets under management or model manager agreements, the company said in a release.

Mann is a managing director and senior banker at Société Générale (SocGen) in New York. Dagan retired in 2010 as chairman of Dwight Asset Management Company, a fixed income and stable value asset management firm that invests on behalf of institutional clients including retirement funds and endowments.  

Mann and Dagan are the fourth and fifth members to join F-Squared’s board, which includes the firm’s president and CEO, Howard Present; vice chairman, George McClelland; and outside director Steve Ricci, the co-founder of OneLiberty Ventures and Special Partner at Flagship Ventures.

Mann, a Chartered Financial Analyst, graduated from State University of New York in 1972 and holds an MBA from New York University and a JD from Fordham Law School. He has also completed the Advanced Management Program at Harvard Business School. 

Dagan, a Chartered Financial Analyst, graduated from Bucknell University in 1974 and attended the Women’s Director Development Program at the Kellogg School of Management. She has also completed the Advanced Management program at Harvard Business School.

Jefferson National completes management buyout  

Jefferson National Financial has completed an $83 million management buyout financed by Financial Partners Fund (a unit of Citi Capital Advisors), The Stephens Group and private investor Eric Schwartz. The buyout was led by Mitchell H. Caplan, Jefferson National’s CEO.   

The company, which sells variable annuities to Registered Investment Advisors (RIAs) and fee-based advisors primarily as tax deferral vehicles, charges a flat insurance fee of $20 a month rather than commissions or expense ratios, and has taken advantage of the trend away from commission-based sales by advisors.

In a statement, Caplan said, “Starting in 2005, Jefferson National completely re-engineered the way variable annuities are bought and sold with a singular focus on serving fee-based advisors.

“Transforming the product with a proprietary technology platform, and rebuilding the distribution from the traditional wholesaler-driven model to a unique direct-marketing model, we have been able to dramatically reduce costs, create greater consumer value and become the leading variable annuity provider to the fee-based channel.”  

  A former CEO of E*Trade Financial, Caplan joined Jefferson National in 2010, reuniting with a leadership team that worked on Telebank, the nation’s first direct bank, and E*Trade. The team includes Laurence Greenberg, president of Jefferson National and former COO of Telebank, and David Lau, chief operating officer of Jefferson National. During their tenure, Telebank’s deposits grew from $200 million in 1994 to more than $8 billion in 2000. During Caplan’s tenure as CEO of E*Trade, revenue increased from less than $1 billion in 2003 to approximately $3 billion in 2006.

Donna MacFarland named CMO at Lincoln Financial

Lincoln Financial Group today has named Donna MacFarland chief marketing officer of its Retirement Plan Services business. She will lead marketing initiatives, including the development of integrated business-to-business and business-to-consumer marketing strategies, and will manage Retirement Plan Services Participant Communications and Education offering.

MacFarland joined Lincoln in May 2010 as marketing director. She reports to Chuck Cornelio, president of Retirement Plan Services for Lincoln Financial.

Prior to joining Lincoln, MacFarland was founder and president of Symphonic Marketing, LLC, a marketing strategy consultancy focused on partnering with companies to drive growth through insights generation and marketing planning. Previously, she held senior brand management and marketing positions with The Vanguard Group, Inc., Merrill Lynch, Citibank, and Smith Barney.

Thomas Mann and Laura Dagan join F-Squared board 

Thomas F. Mann and Laura P. Dagan have joined the Board of Directors of F-Squared Investments, which currently has nearly $6 billion in assets under management or model manager agreements, the company said in a release.

Mann is a managing director and senior banker at Société Générale (SocGen) in New York. Dagan retired in 2010 as chairman of Dwight Asset Management Company, a fixed income and stable value asset management firm that invests on behalf of institutional clients including retirement funds and endowments.  

Mann and Dagan are the fourth and fifth members to join F-Squared’s board, which includes the firm’s president and CEO, Howard Present; vice chairman, George McClelland; and outside director Steve Ricci, the co-founder of OneLiberty Ventures and Special Partner at Flagship Ventures.

Mann, a Chartered Financial Analyst, graduated from State University of New York in 1972 and holds an MBA from New York University and a JD from Fordham Law School. He has also completed the Advanced Management Program at Harvard Business School. 

Dagan, a Chartered Financial Analyst, graduated from Bucknell University in 1974 and attended the Women’s Director Development Program at the Kellogg School of Management. She has also completed the Advanced Management program at Harvard Business School.

Fund investors withdrew an estimated net $22 billion from stock and bond mutual funds in the US in December. Net outflows from long-term mutual funds were $3 billion in November. The numbers, provided by Strategic Insight, included open-end and closed-end mutual funds, excluding ETFs and funds underlying variable annuities.

 “Investor sentiment remains cautious,” said Avi Nachmany, SI’s director of research. “Although the S&P 500 rose 1% in December, fund shareholders are still suffering from volatility fatigue following the ups and downs of the second half of 2011. Portfolio rebalancing may result in reduced outflows from US equity funds in January, especially if the US stock market continues its 2012 rise.”

For the full-year 2011, long-term mutual funds saw net inflows of just $65 billion (excluding ETFs and VA funds), a dramatic drop from the net inflow of $247 billion in 2010. 

Equity funds

Looking solely at equity funds, net outflows from U.S. funds increased to $24 billion in December from $11 billion in November, while net outflows from international and global equity funds rose to $11 billion in December from $3 billion in November.

For all of 2011, domestic equity funds saw net outflows of $85 billion and international equity funds saw net inflows of $34 billion, for a net outflow of $51 billion from all long-term equity funds.

International equity funds were hurt by the Eurozone debt crisis and by U.S. dollar appreciation. The average international stock fund lost 12% last year, while the average US equity fund was about flat.

Utility funds, long/short funds and multi-alternative funds posted positive flows in December.  “While there is a lack of enthusiasm for US equity funds, investors continue to seek out solutions aimed at lessening portfolio volatility and reducing correlation,” Nachmany said.

Bond funds

Bond funds saw net inflows of $13 billion in December, including $8 billion to taxable bond funds and $5 billion to municipal bond funds. Investors continued to see bond funds as a refuge as well as an income source. 

Intermediate-term, high-yield and short-term municipal funds led the December bond fund flows. Muni bond funds have been enjoying a revival of demand as fears of widespread defaults have faded.

For the full year 2011, bond funds saw $116 billion in net inflows, where strong net inflows of $129 billion to taxable bond funds were slightly offset by net outflows of $13 billion from municipal bond funds.

Money market funds

December was the second consecutive month of positive net flows to money funds, with $39 billion in net inflows following November’s net inflows of $42 billion. For the full year 2011, money market funds saw aggregate net outflows of $135 billion due to near-zero yields.

ETFs

In December, U.S. Exchange-Traded Funds (ETFs) experienced $16 billion in net inflows. Large-cap blend, large-cap growth and large-cap value ETFs led the way with combined net flows of $10.5 billion for the month. The biggest ETF, the SPDR S&P 500 ETF, saw $4.9 billion in net inflows in December. Precious metals ETFs saw net outflows in December.

For full-year 2011, ETFs (including ETNs) saw net inflows of $115 billion. That followed net inflows of $111 billion in 2010. It also marked the fifth consecutive year that US ETFs saw $100 billion or more in net inflows. At the end of 2011, US ETF assets stood at $1.06 trillion.

© 2012 RIJ Publishing LLC. All rights reserved.

From the perspective of customers, who are the best 401(k) providers?

Three service providers stood out in PLANSPONSOR’s annual Defined Contribution Survey this year: Bank of America Merrill Lynch, Diversified Retirement Corporation, and BMO Institutional Trust Services.  Those providers won the greatest number of service “cups” in the survey’s five main asset classes, based on the evaluations of nearly 7,000 employers of all sizes across the United States.

PLANSPONSOR is the nation’s leading source of retirement plan information for employers.

Other standout rankings were earned (in alphabetical order) by American Trust, Ascensus, DailyAccess Corp., J.P. Morgan, MBM Advisors, Milliman Inc., The Newport Group, TIAA-CREF, Transamerica, and Vanguard.

The survey results — and rankings of 47 providers by their plan sponsor clients — were profiled in a recent issue of PLANSPONSOR magazine. The winners will be honored in New York City on March 29th, 2012 at Pier 60 of the Chelsea Piers.

Quinn Keeler, senior vice president and head of Research at Asset International, Inc., parent company of PLANSPONSOR, said providers are awarded “Best in Class” status based on top-quartile performance in five designations defined by plan size. Providers who won the most “cups” in each asset category were designated this year as Gold, Silver, or Bronze Cup winners.

The top providers in each asset category were: 

Other 401(k) providers cited by PLANSPONSOR across 23 categories can be found at http://www.plansponsor.com/2011_DC_Survey.aspx

Guardian Life to hire over 800 financial representatives   

Throughout 2012, the Guardian Life Insurance Company of America will be hiring over 800 financial representatives by targeting and recruiting career-changers as part of its distribution force recruitment strategy, the company said in a release.  

 “Unlike employers with a more traditional view of the job market, we welcome career changers and experienced professionals who may have recently experienced a downsizing or who are working in unfulfilling jobs where their skills are undervalued,” said Meg Skinner, Guardian Life’s chief distribution officer.   

Skinner said Guardian’s need for qualified sales reps reflects the public’s increasing demand for safer financial products. “The same economic issues causing problems in other industries make the secure, reliable products Guardian offers an even more valued commodity,” she said.

Guardian Life also announced it is a founding member of the newly reorganized, not-for-profit SPARK Institute, created from the merger of two leading retirement plan industry associations, SPARK and The SPARK Institute. The resulting association represents a retirement plan service providers and asset managers.

The SPARK Institute will broaden its support of employer-sponsored retirement plans through a more active public policy agenda and increased industry partnerships. Guardian is one of of ten leading retirement plan industry members that funded the transition.

Most middle-income elderly satisfied with Medicare: Bankers Life 

Most (82%)middle-income Americans on Medicare are “extremely” or “very” satisfied with their access to health care and with the quality of the care they receive under the program, according to a study by the Bankers Life Center for a Secure Retirement.

The study, Retirement Healthcare for Middle-Income Americans, surveyed two groups: 400 pre-Medicare Boomers (age 47 to 64) and 400 older adults (age 65 to 75). Both groups had annual household incomes of $25,000 to $75,000.

Medicare recipients tended to be more satisfied with their health care than were people still using private health care. Only 2% of Americans on Medicare were not satisfied with the federal program. By contrast, 24% of Boomers not yet on Medicare said they were dissatisfied with the quality of healthcare they receive. Only 46% were “extremely” or “very” satisfied with their care. 

Medicare’s future was on the minds of most people. More than eight out of ten (87%) of those surveyed were concerned about the future of Medicare; 71% believe Medicare benefits will be reduced. Currently, an estimated 22% of middle-income Boomers are uninsured and consider Medicare their healthcare safety net, the study said. About 85% of Americans over age 65 are expected to rely on Medicare for health insurance.

Regarding healthcare reform, the CSR study showed that more than half of middle-income Americans over the age of 47 don’t know whether or not it will benefit them. A third (36%) don’t expect reform to benefit people in their age group; only 13% believe that reforms, often called Obamacare, will be beneficial. 

The Bankers Life and Casualty Company Center for a Secure Retirement’s study Retirement Healthcare for Middle-Income Americans was conducted in September 2011 by the independent research firm, The Blackstone Group. The complete report can be viewed at www.CenterForASecureRetirement.com.

Professional Testing acquires Society of Certified Senior Advisors

Professional Testing Inc., a credentialing and assessment company with a portfolio of corporate-sponsored credentials, has acquired the Society of Certified Senior Advisors (SCSA), which provides education and credentialing to professionals who serve seniors.  

 SCSA will continue to operate under its current name as a division of Professional Testing and will maintain offices and present staffing near Denver. It “will draw on the credentialing, exam development and accreditation management of Professional Testing’s team headquartered in Orlando, Florida. Ed Pittock, founder of SCSA, will continue to serve as a consultant to SCSA,” the companies said in a release

Four years ago, the Society of Certified Senior Advisors received accreditation of their Certified Senior Advisor (CSA) credential through the National Commission for Certifying Agencies (NCCA), the standards and accrediting division of the Institute for Credentialing Excellence (ICE). 

Professional Testing has been a developer of credentialing and assessment programs serving professional associations, federal and state government agencies and private industry since 1971. It serves more than 50 client organizations representing more than 200 credentials.  

Americans’ family fealty is strong but ‘not unlimited’: MetLife   

Americans’ sense of financial obligation to family members is strong and born out of love and generosity, but does have limits, according to a new study by the MetLife Mature Market Institute.

Multi-Generational Views on Family Financial Obligations: A MetLife Survey of Baby Boomers and Members of Generations X and Y reports that Baby Boomers (b. 1946–1964), Gen Xers (b. 1965–1976) and Gen Yers (b. 1977–1990) agree that parents should support children through their college years, help with tuition (90%) and step in to provide financial assistance during a financial emergency – not of the child’s doing.

They stop short, however, at paying 100% of college tuition if the cost is particularly high, and at bailing their kids out of debt when the debt is from overspending. Fewer feel responsible for contributing to the down payment on a house – just seven percent of those surveyed said they feel an absolute or strong responsibility to do so.

The online survey of 2,123 Americans, ages 21 to 65, was conducted from June 29 to July 20, 2011. Respondents were selected from among Harris Interactive’s online research panel. To qualify, respondents had to have household incomes of at least $40,000 ($30,000 if Gen Y). Boomers and members of Gen X were required to have a dependent—either a spouse or a child; Gen Yers did not necessarily have dependents.

The data was weighted by age, gender, education, and race/ethnicity to best reflect this target population. The online survey was conducted by Mathew Greenwald & Associates.   

The Principal and Edward Jones team up for retirement plan sales  

Principal Financial Group announced a new retirement plan sales alliance relationship with Edward Jones. Effective January 4, 2012, The Principal is approved as a preferred retirement plan product provider for Edward Jones’ clients. The formal agreement allows Edward Jones’ financial advisors to sell defined contribution plans with The Principal.

Of Edward Jones’ 12,000-plus financial advisors, 7,000 currently market 401(k), 403(b) or 457 plans.

“Our relationship with Edward Jones significantly broadens our distribution channels and will help continue the strong sales growth we’ve experienced through national broker-dealers,” said Dan McGee, vice president, managing director of distribution, retirement and investor services, The Principal.

“We believe this relationship with The Principal is a great fit for Edward Jones,” said Edward O’Neal, principal at Edward Jones. “The retirement plan market is a strong focus of Edward Jones and the quality of our strategic alliance is very important to providing a strong menu of products, services and solutions to help our financial advisors serve the needs of plan sponsors in their communities.”

Mutual of Omaha allies with Securities America

Mutual of Omaha Retirement Plans Division has announced a new strategic alliance with Securities America that will make Mutual’s retirement plans available to Securities America’s financial professionals nationwide.

 The relationship is part of Mutual’s strategic goal of doubling its retirement plans product distribution and advisor support programs to producers affiliated with key broker-dealers across the nation, said Chuck Lombardo, president and CEO of Retirement Marketing Solutions, Inc. (RMS), a Mutual of Omaha subsidiary.

Securities America has recently increased its commitment to the retirement plans market and has chosen Mutual of Omaha as one of its select group of retirement plan providers. In turn, this alliance is part of Mutual’s commitment to develop long-term relationships with producers that are dedicated to retirement plans, Lombardo said.

Securities America advisors will also have access to educational tools and resources through Mutual of Omaha. This includes The 401k Coach Program, fiduciary support programs as well as third-party investment comparisons from FiRM to help demonstrate a commitment to fair and competitive fees.

SPARK releases template for retirement plan disclosures

The SPARK Institute has released spreadsheet templates of its Data Layouts for Non-Registered Investment Product Disclosures to Retirement Plan Participants that were published in September, said Larry Goldbrum, General Counsel.  “We received feedback from our membership and others in the retirement plan community that spreadsheet templates of the Data Layouts would make it easier for, and increase the likelihood that, non-registered investment product providers would adopt the standards,” Goldbrum said.  The availability of the spreadsheet templates adds another level of standardization to this process and makes it easier for companies who do not want to program for transmitting ASCII files to adopt the standards,  Goldbrum said. 

The Data Layouts are designed for use by non-registered investment product providers (e.g., bank collective investment funds, non-registered “fund of funds,” separately managed accounts and annuities) and record keepers to share information that retirement plan administrators must disclose to participants under the Department of Labor’s participant disclosure regulations, Goldbrum said.  There are two templates, one for variable rate of return investments, employer securities and annuities, and another for fixed rate of return investment products.  The spreadsheet templates are substantively the same as the original narrative version of the layouts and are posted, along with instructions for their use, on The SPARK Institute website at http://www.sparkinstitute.org/comments-and-materials.php.  They are available at no charge for use by anyone.

A newly six-member team dedicated to building “an understanding of the end-consumer’s decision-making process as it relates to their financial future” has been formed by Lincoln Financial Group.

Emily Pachuta will lead the team, as head of Consumer Insights group within Lincoln’s Insurance Solutions/Retirement Solutions division. She reports to Kristen Phillips, head of IS/RS Marketing and Strategy.

“The Consumer Insights team is charged with capturing quantitative and qualitative information about consumers that can better inform product design and distribution decisions across Lincoln’s four core businesses of Annuities, Life Insurance, Group Protection, and Retirement Plan Services,” the company said in a release.

“Industry studies and reports typically focus on why consumers don’t adopt solutions,” said Pachuta in a statement. “Lincoln takes a different approach, focusing on why people do adopt solutions. Basically, 90% of decision-making is irrational and subconscious, so a deeper understanding of decision-making drivers will help us, as well as financial advisors, better understand the actions that will improve one’s financial life.”

Pachuta joined Lincoln in September of 2007. She has served as Retirement Income Marketing Director and vice president and head of Strategic and Product Marketing.  Prior to Lincoln, she was Director of Field Marketing at Merrill Lynch’s Global Private Client Group. She earned a B.A. from Yale and an MFA from New York University.

Lincoln also announced that Daniel P. Gangemi has joined the Consumer Insights team, reporting to Pachuta, as a Director focusing on the Retirement Plan Services business. He will focus on understanding retirement plan participants, plan sponsors, retirement-focused intermediaries, and the broad retirement plan marketplace. He will also have responsibility for generating insights on exploratory consumer segments, including Mass Market, Mass Affluent, and Gen X & Y.

Gangemi has a background in both market research and the retirement plan market. He has held positions at Prudential Investments, OppenheimerFunds, and AllianceBernstein. He has a B.A. and M.A. in English from the City University of New York.

© 2012 RIJ Publishing LLC. All rights reserved.

Aria Retirement Solutions (Aria) has announced the first of a series of RetireOne guaranteed income solutions that serve independent registered investment advisors (RIAs) operating fee-only practices.    

RetireOne Transamerica, the initial product, is a stand-alone living benefit (SALB). It wraps a fixed contingent annuity of the type usually found in variable annuities with guaranteed living benefits around a portfolio of mutual funds and ETFs offered by American Funds, iShares, PIMCO, Vanguard, and Dimensional Fund Advisors. Transamerica Advisors Life provides the income guarantee. The broker-dealer is Protected Investors of America.

The RetireOne Transamerica solution is the first of what Aria CEO David Stone said will be several RetireOne income solutions provided by Aria in partnership with major insurance carriers.  

“RetireOne’s income solutions will provide latitude for investment allocation by RIAs to employ a wide spectrum of strategies and adjust exposure to risk for their clients,” said Neil Wilding, Aria executive vice president and national sales director in a release.

Headquartered in San Francisco, Aria was founded by executives who had been at Charles Schwab, Fidelity and other firms. Aria’s Retirement Solutions Advisor Center in Louisville, Ky., will support the new products.  

Lockwood Advisors introduced the first stand-alone living benefit in late 2007, in a partnership with the Phoenix Companies. It was a way to let money managers add a guaranteed lifetime income guarantee to whatever portfolios they happened to be managing. The cost of the rider varied according to the risk profile of the underlying portfolio.   

In August 2009, Nationwide Life Insurance announced a deal to add a guaranteed lifetime withdrawal benefit (GLWB) rider to certain unified managed accounts (UMAs) at Morgan Stanley Smith Barney (MSSB). Select Retirement, as Nationwide’s GLWB was called, could be applied to assets in MSSB’s Select UMA, a product launched by Smith Barney in April 2008.  

In August 2010, Investors Capital Corporation (ICC), a broker-dealer and investment advisory unit of Investors Capital Holdings, Ltd., launched the Investor Protector series: a managed investment account paired with a stand-alone income benefit. The account combined Investors Capital Advisory Services’ (ICA) series of asset allocation models with a stand-alone lifetime benefit that offered the investor a 5% lifetime income stream, regardless of market conditions.  

The initial investment account value established the client’s Retirement Income Base (RIB). The investor was able to lock in a higher RIB if the account value was higher on the anniversary date for an additional fee. At age 65, the client could draw a 5% stream of income based on the highest, locked-in RIB. A spousal benefit was also available.

© 2012 RIJ Publishing LLC. All rights reserved.