Maybe first really is best. Jefferson National continues it’s dominance in the flat-fee variable annuity space, a product that lends itself particularly well to the RIA business model.
Colorado-based Trust Company of America said Tuesday it will begin offering Jefferson National’s Monument Advisor, a flat-fee Investment-Only Variable Annuity (IOVA) with more than 350 underlying funds. The partnership will allow advisors to build their own portfolios within Monument Advisor, using more than 350 underlying funds. With the TCA platform, advisors “can develop and manage any strategy to satisfy any risk profile,” according to the company.
“High-net-worth clients may max out the contribution limits to their qualified plans ($18,000 in 2015) and need additional vehicles and strategies to grow portfolios and minimize taxes,” said Joshua Pace, president and CEO of Trust Company of America. “Once qualified accounts like 401(k)s and IRAs are maxed out, a low-cost variable annuity may make sense.”
Peter Muckley, TCA’s vice president of marketing, added that it can also act as an attractive rollover solution for advisors to consider with clients—one that’s “an alternative or complement to an IRA.”
The company noted that while today’s RIAs are typically skeptical of traditional variable annuities due to their high cost, complex insurance guarantees, steep commissions and limited number of underlying investment choices, Jefferson National’s Monument Advisor eliminates cost, complexity and commissions, to optimize the full power of tax deferral. The Monument Advisor IOVA replaces the typical asset-based insurance fees with a flat fee of $20 a month no matter how much clients invest.
“Fully integrating Jefferson National’s tax-advantaged investing solution on the TCA platform will help RIAs and fee-based advisors provide a more sophisticated approach to portfolio management—and a more holistic approach to financial planning,” Mitchell Caplan, CEO of Jefferson National, said in a statement.
Placing tax-inefficient investments in tax-deferred vehicles for long-term goals like retirement allows advisors to ensure their clients’ assets continue compounding for years without paying taxes until assets are distributed.
“The platform supports any number of custom allocation models online that can be linked directly to clients’ accounts,” said Lindsay Faussone, VP of Business Development at TCA. “It’s fast and simple to make transfers and rebalance portfolios, buy or sell funds, and complete either mass trades or individual trades.
Faussone added that using the TCA platform to manage investments within the Monument Advisor IOVA also enables advisors flexibility in choosing the account from which they take their fee. For example, an advisor can take the Monument Advisor fee from one of the client’s non-qualified taxable accounts on the TCA platform, leaving the tax-deferred IOVA intact to compound and maximize accumulation over the long term. The integration will be finalized in December 2015.
With more than 20 years serving financial markets, John Sullivan is the former editor-in-chief of Investment Advisor magazine and retirement editor of ThinkAdvisor.com. Sullivan is also the former editor of Boomer Market Advisor and Bank Advisor magazines, and has a background in the insurance and investment industries in addition to his journalism roots.
