Nine of the 18 insurance firms that provide variable annuities through financial advisors affiliated with Raymond James Financial Inc. will begin offering new, less expensive investment products this week, meeting a deadline set by the financial services firm.
Raymond James studied variable annuities as an investment, taking into account criticism that they had become too costly and so complex that purchasers found them difficult to understand. In response, the company rolled out a new product design aimed at simplifying the product and still retaining typical standard and optional benefits.
Companies meeting the July 31 deadline were Genworth Life and Annuity Insurance Co., Integrity Life Insurance Co., Jackson National Life Insurance Co., John Hancock Life Insurance Co., Nationwide Life Insurance Co., Ohio National Life Insurance Co., Pruco Life Insurance Co. /American Skandia, Protective Life and Transamerica Life Insurance Co.
Scott Stolz, president of Raymond James' insurance and annuity general agency, emphasized that after a 60-day transition period, the firm's 4,800 financial advisors will no longer offer variable annuities that do not meet the new fee and commission requirements. "Not surprisingly, it is no small task to coordinate a launch date with 18 different insurance companies, so we are happy that nine are ready now," Stolz said, in a statement. "By the end of September, we expect to add four more carriers; the remaining five will follow."
Raymond James said that it expects a short-term reduction of revenue from annuities sales, but expects to benefit from greater client retention.
Previously on WebCPA:
Raymond James Offers Annuity Restructuring (May 12, 2006)
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