IncomeInsight helping advisors strengthen retirement income portfolios
FOR IMMEDIATE RELEASE
May 31, 2011
Jeff Whetzel (614) 249-6354
Charley Gillespie (614) 249-5701
Columbus, OH — With retirement confidence among workers the lowest in 21 years1 advisors have an opportunity to help their clients address their retirement income needs, and do so with strategies that can increase retirement income potential and decrease risk.
Research by Ibbotson Associates, sponsored by Nationwide, finds adding a variable annuity with a lifetime guaranteed minimum withdrawal benefit (VA+GMWB), an optional rider at an additional cost, to a traditional retirement portfolio can increase retirement income potential while decreasing income risk – even when factoring in the market recovery of 2010.
IncomeInsight® was created by Nationwide Financial to help advisors use the VA+GMWB strategy to build stronger retirement portfolios.
“Developing a sound retirement income strategy for their clients is one of the most difficult challenges facing today’s advisors,” said Eric Henderson, senior vice president of Individual Investments for Nationwide Financial. “The IncomeInsight strategy is resonating with our partner firms and their advisors.”
The VA+GMWB strategy is proving to be a valuable retirement income tool
for advisors to restore client confidence. Nationwide saw a 32 percent
increase in variable annuity sales from 2009 to 2010.
Advisors can put the IncomeInsightstrategy to work
Nationwide Financial created an interactive online tool, which is based on Ibbotson’s methodology, to help advisors evaluate whether a VA+GMWB strategy such as Nationwide’s IncomeInsight would complement their client’s investment portfolio.
The online workbook generates the client’s suggested retirement income portfolio. If a VA+GMWB is recommended, the online workbook suggests an amount to put into a variable annuity and the asset allocation within the product. The online tool provides a printout of the completed workbook for the advisor or client’s records.
To streamline the process, advisors can send a new one-page fact finder to the Income Planning Desk at Nationwide to get an IncomeInsight analysis.
To learn more about the IncomeInsight strategy or to get an IncomeInsight analysis, advisors can contact their Nationwide wholesaler or the Income Planning Desk at 1-877-245-0763 Monday through Friday, 9 a.m. to 6 p.m. Eastern time, or by email at IPLNDESK@nationwide.com anytime.
Fee-Based advisors also embracing strategy
Waddell & Reed is one firm that is working with Nationwide Financial to put Ibbotson’s research into practice for their advisors’ clients.
Waddell & Reed introduced the enhanced strategy using a VA+GMWB in January as a component of the firm’s MAPIncome program, which combines the firm’s Managed Allocation Portfolios (MAP) program with a deferred, no-load variable annuity.
“The way Nationwide uses the VA+GMWB strategy resonated with us,” Andy Mohn, senior vice president of Sales Support and Services at Waddell & Reed. “By pairing a deferred, no-load variable annuity with mutual funds, we feel we have an attractive program for which we have high expectations.”
Mohn said the retirement income strategy that incorporates the Ibbotson research is attractive not only to those advisors who are familiar with and have sold variable annuities in the past, but also to fee-based advisors, who may not have previously considered these products as part of a client’s retirement income portfolio.
“The timing of MAPIncome for us was perfect because the number of fee-based advisors is dramatically growing,” said Mohn. “Advisors are embracing this approach and we continue to increase market share with clients that want a fee-based relationship. Our advisors selling variable annuities see this as a practical approach to offering income-oriented solutions for their clients.”
Nationwide, based in Columbus, Ohio, is one of the largest and strongest diversified insurance and financial services organizations in the U.S. and is rated A+ by A.M. Best. The company provides a full range of personalized insurance and financial services, including auto insurance, motorcycle, boat, homeowners, life insurance, farm, commercial insurance, administrative services, annuities, mortgages, mutual funds, pensions and long-term savings plans. For more information, visit www.nationwide.com.
Nationwide doesn't endorse or guarantee any investment model or strategy used by the investor and/or contract owner. Nationwide is not affiliated with any third party that may be authorized by the contract owner to direct allocations.
An annuity is a long-term, tax-deferred investment designed for retirement that will fluctuate in value. It allows you to create a fixed or variable stream of income through a process called annuitization and also provides a variable rate of return based on the performance of the underlying investments.
But, as with most things in life, an annuity does have limitations. If you decide to take your money out early, you may face fees called surrender charges. Plus, if you're not yet 59½, you may also have to pay an additional 10 percent tax penalty on top of ordinary income taxes. A death benefit is available with most variable annuities and naturally, if you do take an early withdrawal, your death benefit and the cash value of the annuity contract will be reduced.
You should also know that an annuity contains guarantees and protections that are subject to the issuing insurance company’s ability to pay for them. But these guarantees don’t apply to any variable accounts that are subject to investment risk, including possible loss of your principal.
An annuity is a contract between you and an insurance company and it’s sold by prospectus. While it may take some time, you should read these documents. They describe risk factors, fees and charges that may apply to you. Variable annuities have fees and charges that include mortality and expense, administrative fees, contract fees, and the expense of the underlying investment options.
All guarantees and protections, where available are subject to the claims-paying ability of Nationwide Life Insurance Company.
Eric Henderson is a registered representative of Nationwide Investment Services Corporation, member FINRA. In MI only: Nationwide Investment Svcs. Corporation.
Ibbotson Associates, Inc., is a registered investment advisor and
wholly owned subsidiary of Morningstar, Inc. The Ibbotson name and logo
are properties of Ibbotson. The study described herein is the proprietary
property of Ibbotson, and may not be reproduced, in whole or in part, in
any manner, without the prior written consent of Ibbotson. Ibbotson and
its affiliates are not related to Nationwide and its affiliates.
The brochure references the mutual funds available with the MAPIA product. Investors should consider the investment objectives, risks, charges and expenses of a mutual fund carefully before investing. For a prospectus, or if available, a summary prospectus containing this and other information on the mutual funds offered by Waddell & Reed, Inc., call your advisor or visit us online at www.waddell.com. Please read the prospectus or summary prospectus carefully before investing.
Please remember that an investment in a mutual fund involves risk. The investment return and principal value of an investment will fluctuate, and shares, when redeemed, may be worth more or less than their original cost. Participation in a MAPIA account is not necessary to purchase mutual fund shares offered within the MAPIA Program. Shares of the mutual funds in MAPIA Program portfolios may be purchased directly from your financial advisor. However, these shares may have a front-end load or back-end charges, which do not apply to shares in the MAPIA Program portfolio.
MAPIA is a mutual fund asset allocation product offered by Waddell & Reed, Inc., in its capacity as a registered investment adviser. An investor or prospective investor should review the fee, cost and payment information contained in the fund prospectuses and the MAP Advisory Services Brochure, in order to ensure that they are fully informed before making investment decisions and are aware of the potential conflicts of interest involved with MAPIA.
Neither Nationwide Financial, nor any of its affiliates, are affiliated with Waddell & Reed or any of its affiliates.
Nationwide variable annuities are underwritten by Nationwide Life Insurance Company, Columbus, Ohio, a member of Nationwide Financial. The general distributor for variable annuity contracts is Nationwide Investment Services Corporation, member FINRA. In MI Only: Nationwide Investment Svcs. Corporation.
Nationwide Income Architect is an individual, flexible premium, deferred variable annuity contract issued by Nationwide Life Insurance Company.
Nationwide, Nationwide Financial, the Nationwide framemark, Nationwide YourLife and On Your Side are service marks of Nationwide Mutual Insurance Company.
12011 Retirement Confidence Survey, Employee Benefit Research Institute (EBRI)