Tool created in partnership with inStream demonstrates how replacing a portion of fixed income portfolio with a next-gen advisory fixed index annuity can improve performance while substantially decreasing risk
San Francisco, CA – April 7th, 2021 – RetireOne® — the leading independent platform for fee-based insurance solutions — today announced the broad availability of the Advisory Annuity Impact Calculator, a tool that enables advisors to evaluate improvements in risk-adjusted returns for their client-specific portfolios. During this time of high equity valuations and low fixed income yields, RetireOne and inStream Solutions, LLC, worked in partnership on this initiative to demonstrate how using the fee-based fixed index annuity (FIA), IndexMax ADVSM, in place of fixed income such as bonds, may increase portfolio performance and decrease risk.
Designed for Registered Investment Advisors (“RIAs”) and Issued by Midland National® Life Insurance Company, IndexMax ADV layers in potential annual performance credits with additional 5- or 7-year term participation credits that are uncapped with a 100% participation rate to provide growth potential in two different forms. The calculator demonstrates how IndexMax ADV is a fixed income solution with the potential to improve portfolio performance. It treats the FIA as an asset class and reallocates (or replaces) a portion of the fixed income portfolio to IndexMax ADV. The calculator then compares the performance of three hypothetical investments: a portfolio with an allocation to the IndexMax ADV, a portfolio with an allocation to a traditional FIA, and an unprotected portfolio without an FIA. The tool performs 5,000 Monte Carlo simulations using historical market data from Morningstar®.
“In partnership with inStream, we created the “Advisory Annuity Impact Calculator“ to illustrate how reallocating a portion of a client portfolio to IndexMax ADV may lead to consistent superior outcomes in performance and reduced risk,” said R. Scott Strait, Ph.D., Co-Founder and CTO, RetireOne. “In fact, over a 5-year period the calculator shows a 3-9% improvement in performance while increasing Sortino ratio by protecting the downside on a portion of the portfolio. Results are positive in a variety of market conditions and can be credited to the unique design of the product and its layered crediting strategies.”
“We are honored to work with RetireOne to launch the Advisory Annuity Impact Calculator, a tool that leverages our financial planning platform and suite of API services,” said Paul Magis, CEO, inStream. “Through inStream’s Integrated API Services, we’re able to help financial advisors and their clients to see the impact of products and strategies in the context of their financial plan, thus helping investors to make more informed decisions.”
In December, The Federal Reserve’s Open Market Committee indicated its intention to keep the short-term benchmark rate low until inflation reaches 2% for the long term1. The low interest rate environment provides financial advisors with an opportunity to consider advisory FIAs as an asset class within an accumulation portfolio to balance growth potential with principal protection.
The Advisory Annuity Impact Calculator enables financial advisors to have a custom look at what replacing a portion of fixed income positions with IndexMax ADV via performance credited through a choice of three underlying indices and a fixed rate option.
Financial advisors who are interested in learning more about the Advisory Annuity Impact Calculator are invited to join RetireOne for a webinar to be held on April 14 at 2PM ET. For additional resources on how FIAs help enable financial advisors to balance growth and protections in client portfolios, please download RetireOne’s recent whitepaper.
Serving over 1,000 RIAs and fee-based advisors since 2011, Aria Retirement Solutions’ RetireOne® is the leading, independent platform for fee-based insurance solutions. With offerings from multiple “A” rated companies, RIAs may access this fiduciary marketplace at no additional cost to them or their clients. Currently servicing over $1 billion of retirement savings and income investments, RetireOne continues to grow in its mission to provide advisors and their clients valuable retirement solutions that are simple to use, easy to understand, and delivered with outstanding service. Learn more at RetireOne.com and follow us on Twitter @RetireOne.
About inStream Solutions
inStream is a financial technology services company focused on providing financial planning solutions, as well as an Integrated Product API service for investment product modeling and recommendation solutions. inStream delivers a sophisticated data engine that continuously evolves and generates personalized, accurate probabilistic plans, or product recommendations based on real-time client, portfolio, market, and product data. For more information, please contact Bryan Lee at firstname.lastname@example.org
1 Federal Open Market Committee. (2020, December 16). Summary of Economic Projections. Retrieved February 04, 2021, from www.federalreserve.gov/monetarypolicy/fomcprojtabl20201216.htm
The IndexMax ADVSM is issued on base contract form AS203A/ICC20-AS203A, or appropriate state variations including all applicable endorsements and riders. This product, its features and riders may not be available in all states.
Fixed index annuities are not a direct investment in the stock market. They are long term insurance products with guarantees backed by the issuing company. They provide the potential for interest to be credited based in part on the performance of specific indices, without the risk of loss of premium due to market downturns or fluctuation. Although fixed index annuities guarantee no loss of premium due to market downturns, deductions from your accumulation value for additional optional benefit riders or strategy fees associated with allocations to enhanced crediting methods could exceed interest credited to the accumulation value, which would result in loss of premium. They may not be appropriate for all clients. Interest credits to a fixed index annuity will not mirror the actual performance of the relevant index.
There is a five-year surrender charge period for IndexMax ADV 5 and a seven-year surrender charge period for IndexMax ADV 7. During this period, a charge is assessed on any amount withdrawn that exceeds the available penalty-free amount. A surrender during the surrender charge period could result in a loss of premium. Surrender charge structure may vary by state.
Non-registered insurance products are sold by Aria Retirement Solutions, Inc. (ARIA), a licensed insurance agency (resident KY license no. DOI-778494). In CA, ARIA is doing business as Aria Insurance Solutions, Inc., (nonresident license no. 0H44773).