This…is 2020, Fear of Bears, Schwabitrade, SECURE Act, How RIAs do Insurance, Louisville Slugging, Celebrating the Life of Dennis Collins

The last quarter was huge for RetireOne. We integrated with Covr Financial Technologies and acquired the EF Legacy Securities broker-dealer from Edelman Financial Engines. Covr grew our insurance offerings, and the EFLS deal pushed us across the $1 billion threshold in AUA with over 12,000 client accounts on our books. We not only celebrated a new year, but we closed the second decade of the new millennium with sweeping new retirement legislation signed into law that could open the door for further modernization. 2020 promises to be even bigger! Stay tuned.

Marking the close of the twenty teens and rolling into the twenties, ABC news offered a compilation of former ABC anchor Barbara Walters‘ 20/20 news magazine greeting last month. In just over 27 seconds viewers are treated to a quarter century time-lapse documenting Babs’ familiar dramatic pause, evolving fashion sense, and her dwindling coif.

Unlike Mizz Walters’ hairdo, in the last quarter, year, and last decade we’ve enjoyed tremendous growth (in the markets). Which is funny because so many folks keep predicting a recession, which, if it comes, there’s no need to panic. Writing in Kiplinger in November, I addressed one of the specific problems retirees face if a bear does return. Speaking of bears and panic, take six minutes and listen to this great story from the Moth (6:15).

In the past decade we’ve also witnessed the rise of the robo. Subsequent competition among custodians has driven investing costs down, and sent commissions on stock and ETF trades to zero. Investing tastes, like skirt silhouettes, have changed.

The drive to lower costs and create real client value has also caught fire among annuity providers which has inspired RIAs to give the oft-maligned products another look. We harp on this a lot, but it can’t be overstated how important it is for these products to evolve as the population of retired folks grows in the United States. Since everyone is living longer, we’ll need better longevity risk protections, and more choices for meeting their retirement goals—which is why our RIA partners like working with us, and why they depend on us to help choose annuity providers for their clients.

The latest development in the fee wars has led to the surprising news of the Schwabitrade deal. (I’m not sure who gets credit for that portmanteau, but cheers to whomever coined it). Experts wonder what impact this may also have on the adoption of annuities among RIAs, since both Schwab and TD have been relatively passive with their limited annuity options. As AITE Group’s Dennis Galant points out, we’re not talking a large volume of annuity usage by RIAs on either platform.

However, the passage of the SECURE act with an omnibus spending bill in late December could change all of that. The first major retirement policy change in a half generation includes provisions that would make it easier to include annuities in employer-based defined contribution plans like 401(k)s. Other major changes include increased access to workplace retirement plans for part-time employees, revised RMD rules, and the end of the so-called non-spousal “Stretch” IRA. Team Kitces did a great job of analyzing and describing some of the more important changes in the act.

How RIAs do Insurance

As mentioned above, we pulled back the curtain on our long-in-the-works partnership with Covr Financial Technologies in November. The deal gives our RIA partner firms access to many different types of insurance for their clients: long-term care, disability, term life, whole life, variable universal, universal, indexed universal, and more. No insurance license required.1

As financial advice grows more automated and commoditized, advisors need to add differentiating capabilities. Insurance planning helps them keep an eye on the whole client and provides tangible advantages over those who don’t offer it.

There’s significant need. I think we’ll see a lot of innovation in the insurance space in the coming decade, and we’ll be pushing for it.

Louisville Slugging

The caption above RetireOne President Ed Mercier’s photo said, “Louisville Slugging.” The photo accompanied the RIABiz story by Oisin Breen about our acquisition of Edelman’s broker-dealer, EF Legacy Securities. I love it! Slugging is what we’re doing. Swinging for fences. Often, we’re just looking for singles and laying down bunts, but this deal is truly a home run for us.

Adding additional revenue, we were able to grow our platform capabilities while keeping our cost to our RIA partners at zero. It is now even easier for folks transitioning to the fee-based model to make RetireOne Agent of Record for annuities held at their former BDs so that they can see and manage those assets for clients. If you have clients with annuities in surrender periods, or clients with annuities that would otherwise be unsuitable to move, call us and see how we can keep them from becoming a house accounts.

Thank You for Choosing RetireOne

In the final quarter of 2019 these advisors began working with us: Tony Lantis, Andrew Taylor, William Dudes, Dalton Chandler, Jonathan Lubell, Harold Moran, Amit Chopra, Joseph McIntosh, Crenshaw Prichett, CPA, Ruben Millares and Dennis Coon.

Thank you for choosing RetireOne, and welcome to the platform! We have some big things coming in 2020. Keep an eye on your inboxes.

View On-Demand Webinars from Q4

  1. How RIAs do Insurance Policy Reviews
    • Covr Financial Technologies Consultant Kyle Lukas demonstrates the process for reviewing insurance policies with clients to deepen relationships, create more holistic plans, and uncover possible additional needs that are not being met.
  2. 9 Annuity Use Cases for RIAs
    • Jackson National’s Tyler Dicke uncovers nine unique scenarios where annuities may benefit the clients of RIA firms.

In Memoriam: Dennis Collins

After a brief fight with cancer Dennis Collins passed away in December. I hesitate to call this a ‘fight’ since cancer always has the upper hand. Before we know there’s a fight, we’ve been sucker punched. Dennis was President and Chief Compliance Officer for our former broker-dealer, Portsmouth Financial Services. He was also a good friend, and wonderful partner.

A grandson of the firm’s founder, Dennis got his start in financial services ferrying checks by bicycle to the Pacific Exchange as a young man. Of Dennis, his partner Echo Chien said, “These past several months he worked very hard to make sure the company his grandfather had helped to found so many years ago would continue to be healthy and strong in the years ahead. He was a wonderful partner till the end.” Yes he was. Rest in peace, Dennis.

Best Wishes,

Stone Signature

David Stone
Founder and CEO