Envestnet, the turnkey asset management platform used by hundreds of RIAs, will now carry annuities, adding both fee-based and commission insurance products to the advisor arsenal.
The firm’s Insurance Exchange offers products from six carriers, including Allianz Life, Nationwide and Prudential, and gives advisors on the platform access to variable, structured, fixed and indexed annuities,
The leading TAMP by assets partnered with the insurance marketplace Fiduciary Exchange, a company that connects wealth management firms with insurance providers, to offer the services. The deal gives insurance providers an avenue to access advisors, while wealth management firms get the options of guaranteed income and downside protection, according to Fiduciary Exchange CEO Dan MacKinnon.
“This bridge from advisory platforms to insurance carriers supports the entire advice lifecycle from accumulation to decumulation,” MacKinnon says.
Envestnet is the first wealth management client to use Fiduciary Exchange. In addition to RIAs, a number of other financial institutions will have access to Envestnet’s exchange, including bank wealth management firms and broker-dealers.
“Historically, fee-only advisors have not sold insurance for a number of reasons,” says Joel Bruckenstein, founder of the advisor technology conference T3. “Insurance products have historically been commission based, so fee-only advisors cannot provide them.”
Advisors still need an insurance license to sell annuities, according to a statement.
“If the insurance exchange offers products that are fee only and better meet the needs of advisors, and if advisors can recommend these products without an insurance license, the benefit can be substantial,” says Bruckenstein.
Other TAMP providers have created similar partnerships in recent months. For example, the Omaha, Nebraska-based
The Insurance Exchange was formed in response to a growing demand for retirement income solutions, according to Envestnet president Bill Crager. Advisors who offer integrated advice to their clients can help them achieve better outcomes, he added.
According to Bruckenstein, advisors that don’t take insurance products into account cannot claim to be doing comprehensive financial planning for clients. “It is important for financial planners to advise on risk management,” Bruckenstein says. “Insurance is part of that.”
