RetireOne Partners with Wade Pfau on White Paper, “Unbundling Investments from Insurance to Solve for Lifetime Sequence-of-Return Risk”
SAN FRANCISCO – (COMMERCIAL THREAD) –RetirementOne® today announces the release of a new white paper written by Wade Pfau, PhD, professor of retirement income at the American College of Financial Services, titled “Separate investment from insurance to resolve lifetime return sequence risk. Pfau explains his research on the unique problem posed by the risk of return streak over a retiree’s ‘fragile decade’ – the last five years of work and the first five years of retirement – and how ConstancySM, a new conditional deferred pension (CDA) might help solve it.
Created through a partnership between RetireOne and Midland National® Life Insurance Company, Constance decouples the insurance component of the annuity from its underlying investments, allowing Registered Investment Advisors (RIAs) to wrap client brokerage accounts, Individual Retirement Accounts (IRAs) or Roth IRAs with income protection for life.1 By integrating annuities into client portfolios, RIAs can manage sequence and longevity risk, while retaining control over client assets and the flexibility to manage their own models, rebalance, buy and sell, and view the assets on the custody platform (s) of their choice. If the hedged portfolio increases in value, the income from that asset may also increase. If the portfolio does not increase in value, income is based on the initial investment value.
“In the past, this type of approach could only be accomplished through a variable annuity with an optional guaranteed living benefit which required a greater degree of commitment and other potential drawbacks,” wrote Pfau. “But Constance is a new option that allows you to place a risk envelope on an existing investment portfolio without creating a taxable event.”
The resulting portfolio protection offers a more flexible way to “wrap around” risk. “With Constance, insurance protection can be abandoned at any time, which can be useful for individual investors who navigate the shaky decade without experiencing a bad streak of returns,” explains Pfau.
Because the sequence of returns can be critical to investment results, retirees from different birth cohorts may be affected by the market differently, even if they make the same financial decisions. Constance provides RIA with protections to help ensure a more stable income stream for clients throughout retirement. The new CDA is available exclusively through RetireOne. RIAs can offer protections to clients’ portfolios by covering a variety of qualifying mutual funds and ETFs from major fund managers such as BlackRock, Dimensional Fund Advisors, Vanguard Group, Charles Schwab, etc.2
“We are looking at the largest cohort of retirees we have ever seen barrel barrel,” said David Stone, Founder and CEO, RetireOne. “Combine that with the disappearance of pensions and other economic factors, and it’s clear we need new tools to meet the needs of Americans approaching retirement. Constance is designed to be one of those tools.
“Separate investment from insurance to resolve lifetime return sequence riskIs free to download from the RetireOne website. Advisors who want to learn more about Constance can schedule a meeting or call their RetireOne relationship manager at (877) 575-2742. For more information, please visit retirementone.com.
Serving over 1,000 RIAs and paid advisors since 2011, Aria Retirement Solutions’ RetireOne® is the leading independent platform for paid insurance solutions. With the offerings of several “A” rated companies, RIAs can access this fiduciary market at no additional cost to themselves or their clients. Currently serving over $ 1.4 billion in retirement savings and income investments, RetireOne continues to grow in its mission to provide advisors and their clients with valuable retirement solutions that are simple to use, easy to understand. and delivered with exceptional service. Learn more at RetireOne.com and follow us on LinkedIn and Twitter @RetireOne.
About Midland National Life Insurance Company
For over 115 years, Midland National® Life Insurance Company (Midland National) has been an industry leader, attributing the strength of the company to its commitment to stability, innovation and dedicated customer service. Midland National is accredited by the Better Business Bureau and has received an A + (superior) rating from AM Best, a large independent rating and appraisal company that rates an insurance company on the basis of its financial strength, operating performance; and the ability to meet ongoing obligations to policy owners. This rating is the second highest out of 15 categories and was confirmed by AM Best for Midland National as part of Sammons® Financial Group, Inc. on July 30, 2021.
Founded as Dakota Mutual Life Insurance Company in 1906, Midland National has been protecting families and preserving heirlooms for generations. Midland National is one of the leading insurance companies in the United States. Midland National is a member of Sammons Financial Group, a subsidiary of Sammons Enterprises, Inc. With its annuities division in West Des Moines, Iowa, and life insurance operations in Sioux Falls, South Dakota, Midland National operates in 49 states and the District of Columbia through its 12,000 Licensed Sales Professionals. For more information, click here.
1Annuity payments are backed by the claims settlement capability of Midland National® Life Insurance Company.
2Only certain investments are available under the Certificate. You are required to invest assets in accordance with a Model Portfolio or a Restricted Asset Allocation Portfolio. Your investments could generate a higher return if you were not subject to the investment requirements. We may change the requirements for eligible assets under the coverage. We can remove a financial institution from our list of approved financial institutions at any time. Please read the prospectus carefully.
The constancySM The conditional collective deferred annuity is issued by Midland National® Life Insurance Company, West Des Moines, Iowa 50266, offered by EF Legacy Securities, LLC (dba RetireOne), member FINRA and underwritten by Sammons Financial Network®, LLC., Member FINRA Certificate Form AC206A and Contract Form AS206A (may vary by state). Sammons Financial Network®, LLC. and Midland National® Life Insurance Company are wholly owned subsidiaries of Sammons® Financial Group, Inc. and are not affiliated with EF Legacy Securities, LLC. and RetireOne.
The constancySM The group conditional deferred annuity can play an important role in your retirement plan, but may not be suitable for everyone. Before investing, you and your financial advisor should discuss aspects that affect the suitability of your situation, including cost, timing of investment, and other retirement assets you may have. The Certificate is intended for long term investment purposes. Excess withdrawals can significantly decrease and even terminate the benefits offered by the Certificate.