Deals & People March 26, 2007

Salient Joins Fidelity’s Ring of RIAs

Salient Wealth Management LLC will now be included in Fidelity Investments’ Wealth Advisor Solutions, which gives customers of the financial services firm the opportunity to build relationships with Fidelity’s network of registered investment advisers.
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According to a press release, Salient’s clients are primarily C-level executives and other high-wealth families located in Northern California who have no less than $2 million to invest.

For advisers to qualify for Fidelity Wealth Advisor Solutions, they must meet certain criteria involving a detailed evaluation of their business model, level of experience and the products and services they offer.

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“We are extremely pleased to have been selected to participate in this program,’ said Richard Stone, the chief executive officer and president of the firm. “We were told that we were selected because our comprehensive wealth management services complement Fidelity’s guidance offering for its high-net-worth customers and we could be an appropriate choice for those customers who are seeking the personalized service offered by a fee-based adviser.’

Salient Wealth Management, formerly known as Salient Financial Corp., has $400 million in assets under management.

In Practice March 25, 2007

Boomer Retirements Fuel Annuity Sales

Advisers who currently target small businesses – or who work with individual participants at businesses of any size – could see a major shift over the next decade, according to a new study.
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According to a report by Reuters, Eric Sondergeld, director of retirement research at LIMRA International, said that growth in the annuity marketplace in 2006 was fueled by new plans offering guaranteed income for life and programs that insure accounts will not go down even if the market falls. “More people are going into retirement with fewer and smaller pensions,” Sondergeld said, according to Reuters.

Individual annuity sales in the U.S. reached $236.2 billion in 2006, an increase of 9% over 2005, mainly due to retiring baby boomers seeking guaranteed income, according to LIMRA International. These sales were boosted mostly by record sales of variable annuities, which rose 17% to $160.6 billion in 2006. The fourth quarter of 2006 was the sixth straight quarter in which variable annuity sales increased when compared with the same quarter from a year ago. Contrarily, sales of fixed annuities fell by 5% in 2006 to $75.6 million, according to a LIMRA press release.

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Research findings that the top annuity selling firms were insurers and that financial planners were the most successful at selling annuities points to retiring baby boomers as the main driver of sales. Growth was seen among all distribution channels, with the largest growth seen among financial planners and independent broker-dealer, whose sales growth in both fixed and variable annuities was up 31% overall for 2006. Growth was also seen by stockbrokers(14%) and career agents (11%). Although banks increased their variable sales by 20%, their fixed annuity sales saw a decrease of 14%, so their annuity growth had a net increase of 1%.

The top overall sellers of individual annuities were American International Group Inc. (AIG), MetLife, ING, Hartford Life, TIAA-CREF, and AXA Equitable, the press release said. The top six variable annuity writers remained unchanged over the previous year, LIMRA said: TIAA-CREF, AXA Equitable, MetLife, Hartford Life, ING, and Lincoln Financial. The best sales in fixed annuities were seen at AIG, Allianz Life, Allstate Financial, New York Life, Aviva, and ING.

The ranking of all annuities sellers can be found here.

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