Wealth2k

One B-D "Steps Up" to Create a Firm-Wide Focus on Retirement Income.

The example of Securities America Investments.

For more than two years, Securities America Investments (the nation's fourth-largest independent broker-dealer in terms of revenue) has utilized The Income for Life Model® as its premier solution for retirement income distribution. According to David J. Drucker in an article that appeared in Research Magazine in January of 2008, by utilizing IFLM Securities America, "is stepping up to the challenge of helping its reps do sophisticated retirement income distribution planning."

One of The Income for Life Model® features that has been embraced by Securities America's advisors is an innovative process to measure a client's need for guaranteed versus variable retirement income, as well as provide guidance on how to combine products and strategies to maximize retirement withdrawals. This is a critical issue for financial advisors to determine for each of their clients. According to Wealth2k CEO, David Macchia, "Wealth2K addressed the needs expressed by these advisors by incorporating an online retirement income risk assessment process that measures the client's sensitivity to volatility [in conjunction with] the appropriateness of a guaranteed income product."

"The guaranteed income product, says Macchia, could be a period-certain fixed annuity, laddered bonds or CDs, or a variable annuity with income rider. "What's important is how they are mixed and matched. The front-loaded investments provide predictable income, while the more aggressively invested money stays in place through the ups and downs of the market."

Securities America rep, Paula Dorion-Gray of Dorion-Gray Retirement Planning in Crystal Lake, Ill., has used the Income for Life Model® for about a year and a half. "What I like is that it sets up and explains retirement income in a very elementary way, so it works for all clients." Every client, says Dorion-Gray, wants to know how they're going to get money out of their portfolio. "The Model is an eye-opener because the client can see that, for the first five years, income will come from a no-risk investment. Then he can see [exactly which investments] will provide income in each subsequent five-year segment." Says Dorion-Gray, most clients focus primarily on the closest five years, see there's a plan in place, and then feel at ease.

Registered reps like the open-architecture nature of The Income for Life Model®. According to John Barton, a Securities America affiliated advisor with CenterPoint Wealth Management in Wichita, Kan. "Because the Model isn't driven by product vendors, the advisor can satisfy his client's income needs in each segment a number of different ways. He can use CDs or money market accounts for the first segment, fixed annuities for the second segment, and the last four segments could be variable annuities, third-party money mangers... whatever." Barton says that appeals to his personal ethics of being objective, while increasing his clients' confidence in his objectivity.

Retirement income planning is an essential and strategic issue for broker-dealers of all sizes. In reference to The Income for Life Model, David J. Drucker says that, "There is a need for products like the Income for Life Model®, and industry players that create and provide these solutions - as Securities America and Wealth2K have done - will gain competitive advantage as savvy advisors realize they can't plan for a new breed of clients without these tools. To read the Drucker article click here [PDF Download].