Independent broker-dealer LPL Financial has launched a variable
annuity platform that should offer more appeal to fee-based
advisors than many competing offerings. Unlike many other variable
annuity products, the LPL Fee-Based Variable Annuity Platform
allows advisors to actively manage investments within the annuity
portfolio. The platform also removes bundled commissions so that
fee-based advisors can incorporate charges into their overall
client consultation fee. The annuities have been streamlined by
offering only one share class for investments. All of the carriers
on the platform have agreed to limit their mortality and expense
charges to no more than 65 basis points. LPL also has eliminated
surrender charges, which often make advisors and clients hesitate
about buying annuities. John Moninger, executive vice president of
Advisory and Brokerage Solutions at LPL Financial, said the launch
reflects both increased demand from financial advisors and from
clients, particularly baby boomers, who are looking for lifetime
income sources as they are nearing or at retirement. "The big
take-away is that we are focused on the ability to provide
discretion, the ability to provide transparency, the consistency of
how advisors can implement the strategy, and the most important
part is getting to an investor who may not have even been presented
this idea before by a fee-based advisor. And in the world of
harmonization, if it comes to fruition, these kind of strategies
actually fit into that as well," Moninger commented. Through the
platform, purchases of fee-based variable annuities will be
integrated in the existing LPL Financial process for opening
accounts for investors, and holdings will be viewable through all
advisor-facing technologies, including BranchNet, the company's
proprietary, Web-based technology platform that allows advisors to
manage all critical aspects of their business. LPL has
approximately 12,400 advisors and nearly all have the ability to do
fee and commission business.
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