Research Roundup

We summarize four recent papers: 'Portfolios for Long-Term Investors,' 'What is the Value of Annuities?,' 'Public Economics and Inequality: Uncovering Our Social Nature,' and 'Financial and Total Wealth Inequality with Low Interest Rates.'

An Annuity’s ‘Moneyness’? There’s an App for That

How will variable annuity contract owners use their income benefits? That question is vital to annuity issuers and to fiduciary advisers with clients who own VAs. This Texas Dep't of Insurance actuary knows a product that can help them find out.

A Chip Off the Old Rock?

Bloomberg reported this week that Prudential is considering selling its retirement plan recordkeeping business. Prudential didn't confirm the report, but several industry insiders did. Low interest rates, high costs of IT makeovers, and sticky stable value fund guarantees are driving the move, RIJ was told.

DOL “delouses” socially responsible investments

Economically-targeted investments, including socially-responsible mutual funds and "green bonds," can be offered in ERISA-regulated retirement plans if they offer competitive return expectations and no unusual risk, Labor Secretary Tom Perez said Thursday.

RetirePreneur: Cindy Hounsell

Cindy Hounsell is the founder and president of the nonprofit organization, Women’s Institute for a Secure Retirement.

As DOL ponders fiduciary proposal, retail channel assets grow

“U.S. retail channels have exhibited strong growth in recent years, driven primarily by Baby Boomers transitioning assets out of traditional institutional channels, such as 401(k) plans,” said Jennifer Muzerall, senior analyst at Cerulli, in a release.

Quote of the Week

"If some people have skills that are worth paying for, but it is difficult to determine who they are, everyone will be able to charge more. This mechanism is part of the explanation of high profits - and high remuneration - in the financial sector. Price competition is also often ineffectual when the item in question represents only a small part of the overall cost of the transaction." - John Kay, in "Other People's Money" (Public Affairs, 2015).