RIABiz: “BlackRock is going big into the annuity business”

Writing in RIABiz, Oisin Breen surveys the BlackRock/Microsoft deal announced last month that aims to ‘reimagine retirement planning.’ Since tech disruptions have yet to impact annuity pricing, RetireOne CEO David Stone believes this partnership could be good news for investors…Especially as 10,000 Baby Boomers retire every day, and the need for lifetime income increases.

Could the deal signal even more interest on the part of money managers to establish a beachhead in the planning space? If so, it will speed the need for RIAs to become, as Retirement Income Journal’s Kerry Pechter says, “ambidextrous” in their ability to incorporate both traditional investments and insurance solutions like annuities into their clients’ financial plans.

Of course, we can’t know if they’ll succeed in meeting the retirement income challenge, but with the death of recent legislation aimed at increasing the use of annuities in company-sponsored retirement plans, it may be a bit of an uphill battle. It may also be tough to distribute lifetime income products in their current forms. An unbundled solution like a Contingent Deferred Annuity (aka portfolio income guarantee) could be a gamechanger.