Data & Research August 30, 2010

Individuals Want Advice on Life Insurance Needs

Although half of households feel they need more life insurance, ownership of individual life insurance has hit a 50-year low, according to a new LIMRA study.

 

Reported by

The Trends in Life Insurance Ownership study, conducted every six years by LIMRA, found 24% of households with children under age 18 want to speak with a financial professional about their life insurance needs; and a quarter of all households plan to buy life insurance in the next year.  A similar percentage of middle-market households admit they don’t know how to obtain or reach their financial goals, including buying life insurance.    

According to LIMRA’s study, one of the biggest obstacles is lack of information.  A press release said almost eight in 10 U.S. households currently do not have a personal life insurance agent or broker to turn to and most of them say they never did.    

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The study found life insurance beat out all other sources of financial assets or income that Americans expect to use to help pay bills and to maintain their lifestyle in the event of the primary wage-earner’s death. Only 44% of U.S. households have individual life insurance, and 30% (35 million) have no life insurance coverage. Among households with children under age 18, 11 million have no coverage.    

Most individual life insurance policies are sold by insurance agents and the survey indicates many Americans want to keep buying in this manner.  Sixty percent of Baby Boomer households prefer to buy life insurance face-to-face.  Younger generations say they also are interested in gathering information about life insurance online and at their place of work.     

“September is Life Insurance Awareness Month, the one time each year when the insurance industry comes together to remind Americans of the need to include life insurance in their financial plans. Hopefully, these findings will help us get people’s attention and serve as a wake-up call that now is the time to take action,” said Marvin H. Feldman, CLU, ChFC, president and CEO of the LIFE Foundation, in the announcement.  

More information is at http://www.limra.com/LIAM/?Lang=EN&Region=NA.  

Deals & People August 30, 2010

Schwab to Acquire Windward Investment Management

The Charles Schwab Corporation is paying $150 million in stocks and cash for Windward Investment Management, an exchange-traded fund (ETF)-focused investment advisory firm headquartered in Boston.  
Reported by

The acquisition will enable Schwab to expand its’ business in the rapidly growing field of ETFs.  As of July 31, Windward managed $3.9 million in assets, held in three investment portfolios primarily made up of ETFs.  

The deal is expected to close in the fourth quarter.  Upon closing, Windward’s money management solutions and ETF-based portfolios will be made available to clients of independent registered investment advisers (RIAs), retail clients, as well as independent investors. Stephen J. Cucchiaro, the founder, president and chief investment officer of Windward, along with his investment team, will remain with the firm to maintain and oversee the investment and portfolio management processes in place today. 

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“Among independent advisers and retail investors there is a growing interest in the kind of value Windward can provide – portfolio construction which puts risk management at its core–an ideal approach for today’s world,” said Walt Bettinger, Schwab president and chief executive officer. “A number of Schwab Advisor Services clients currently rely on Windward for cost-effective and highly diversified core portfolio holdings for their clients, and we think that upon closing streamlined access and improved pricing from Schwab will further fuel Windward’s growth and enable us to add significant client value for advisers.” 

In a statement, Schwab said it expects the acquisition to show “modest” gains during the first 12 months after the deal closes. Schwab had seen a 38% jump in ETF usage among its clients from June 2009 to June 2010, and it expects those numbers to continue to climb.  

In July, Schwab posted flat second-quarter profit but showed signs of emerging from the damage inflicted by low interest rates and money-market fund fee waivers. 

 

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