Deals & People October 10, 2007

Phoenix and Jefferson National to Target Fee-Based Advisers

The Phoenix Companies, Inc., and Jefferson National Life Insurance Company have formed a strategic alliance to target the rapidly growing segment of fee-based advisers in wirehouses, regional broker-dealers, and financial institutions.
Reported by

Under the alliance, the companies will leverage Jefferson National’s technology platform, designed expressly to serve the fee-based market, and Phoenix’s product expertise in applying living benefits riders, such as the guaranteed minimum withdrawal benefit, to financial products, according to a press release.

“With Phoenix’s distribution network in wirehouses, regional broker-dealers, and financial institutions, and Jefferson National’s proven track record of innovating the way that annuities are priced and sold, together we are poised to penetrate the rapidly growing number of fee-based advisers who are attracting more customers to these distribution channels,’ said Laurence Greenberg, president and chief executive officer of Jefferson National Life Insurance Company, in the release.

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Greenberg noted that numerous industry sources, including Tiburon, Cerulli, and FRC, say both wirehouses and regional broker-dealers have been actively encouraging the transition to a fee-based model. Assets managed by fee-based and fee-only advisers have steadily increased from roughly $1.5 trillion in 2002 to more than $2.2 trillion in 2006, and the broader fee-based market is forecast to increase to more than $10 trillion by 2010, according to the release.

More about Jefferson National can be found at www.jeffnat.com, and more about the Phoenix Companies can be found at www.phoenixwm.com.

Compliance October 9, 2007

Senator Clinton Proposes Government Help for Retirement Savings

On Tuesday, Senator Hillary Rodham Clinton (D-New York) proposed legislation that would ensure a dollar-for-dollar government match on the first $1,000 in employee 401(k) contributions and would offer a new retirement savings vehicle for individuals not covered by 401(k) plans.
Reported by

According to a statement, the match would only apply to 401(k) plan participants earning up to $60,000; however, for those earning between $60,000 to $100,000, the government would give a 50% tax credit for the first $1,000 contributed by employees.

The proposal was made while on a campaign stop in Iowa. Clinton, a presidential hopeful, also proposed a retirement savings vehicle for individuals not covered by 401(k) plans. With the so-called American Retirement Accounts, which would allow a pretax contribution of up to $5,000 per year, individuals would get the same proposed government matches as those with 401(k) accounts. For these accounts, however, individuals would be able choose their own retirement plan provider.

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The American Retirement accounts would provide “universal access to a generous 401(k) for all Americans,” and help the individuals “who are currently falling through the cracks of our system, while reducing wealth inequality, increasing national savings, and encouraging economic growth. And they will ensure all Americans can save and build wealth for their retirement,” according to the statement.

The American Retirement Accounts would allow individuals to make withdrawals for such expenses as a down payment on a home or for education expenses. Withdrawals of up to 15% of account balances would also be allowed during periods of extended unemployment – with no penalty.

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