Cetera, product sponsors launch tool as firms embrace annuity demos

As the industry works toward demystifying annuities, Cetera Financial Group and major product sponsors are launching a retirement planning tool aimed at addressing longevity.

Over the past two years, the independent broker-dealer network, Allianz and Capital Group developed SetIncome, a simulation program comparing annuities to asset management models, according to Cetera President Adam Antoniades.

Cetera plans to roll out the initial version of the tool — which uses an Allianz fixed-index annuity and mutual funds by PIMCO, Allianz Global Investors and American Funds — in the fourth quarter, he notes. The 7,500-advisor network is training up representatives at its Connect conference this week.

The integration comes as other firms ramp up technology around annuity demonstrations. BlackRock and Microsoft are developing a 401(k) tool that will include the products, and an expanding fee-only RIA insurance network called DPL Financial Partners is also enhancing its calculator demos for advisors.

Cetera “will absolutely expand the products and the partner base” shown to existing and prospective clients in the proposal generator, according to Antoniades. He describes the tool as a single display of two types of products that “frankly sit across the aisle from each other.”

“If you're going to buy products for the client, you should know how they work together within the portfolio rather than as two distinct solutions,” Antoniades says.

Cetera’s My Advice Architect — its Envestnet-powered corporate advisory platform — offers thousands of mutual funds from more than 250 managers and hundreds of variable life and annuity contracts from over 100 insurers, according to its SEC Form ADV brochure.

The advisory program also lists more than 60 strategic partners which pay the firm extra compensation based on assets or a flat fee. Each of the companies participating in SetIncome are strategic partners, the Form ADV brochure for Cetera’s corporate RIA states.

The SetIncome portfolios use tactical and strategic allocation strategies, with a majority of the holdings in the latter category. The prop gen tool enables advisors to deploy retirement income strategies for clients in only five clicks, according to Cetera and the other collaborating firms.

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“These firms have come together to bring leading asset management and annuities solutions within a powerful technology platform to create better retirement outcomes and fill a critical gap in the marketplace, effectively disrupting the retirement income landscape,” Jacqueline Hunt, a member of Allianz’s board, said in a statement.

Other annuity tech also aims at that goal. More than 250 RIAs work with David Lau’s DPL Financial Partners to access fee-only insurance products from 15 carriers. The firm has facilitated about $400 million in contracts to RIAs since it launched just five quarters ago, Lau says.

The company built software that integrates with firms’ existing platforms to demonstrate how particular products would affect a client’s plan. Its website also has a calculator gaming out annuities based on client needs and product features.

After receiving a private equity infusion last year, Lau says the company is near closing on another funding round he hopes to spend on additional calculator tools and further integrations. He’s a “huge believer” in the simulator tools being rolled out by Cetera and other firms, he says.

“What I really like about it is it makes pricing matter, which has never really mattered so much in the annuity world. It's all built up around sales stories,” Lau says. “The carriers we work with — they care a lot about how their products come out within that calculator. They've become very aware of pricing and how they're priced, relative to their competition.”

Cetera’s network is consolidating from six firms to five as its largest IBD folds in its smallest one. Summit Brokerage Services is dropping its IBD to become a region within Cetera Advisor Networks. A major existing region at Cetera’s largest IBD — AdvisorNet — also recruited two advisors with $230 million in client assets.

Dan May’s office of supervisory jurisdiction added advisors Aron Martz and Michael Martin, who had worked together at a South Dakota branch of U.S. Bank for the past five years. They affiliated with Cetera on May 10, according to FINRA BrokerCheck.

“We have the unique ability to tap into hands-on regional service backed by the strength and capabilities of a nationwide organization and it's made the launch of our practice more seamless for us and more importantly, for our clients," Martz said in a statement.

Representatives for U.S. Bank didn’t respond to a request for comment on their move.