Fintech Luma Financial Technologies and data provider Cannex have partnered to provide advisers with product data and modeling support across all annuity types including fixed rate, fixed indexed, registered index-linked and variable annuities.
The partnership lets Luma leverage the Cannex database, savings annuity platform and illustration engine designed to give financial advisers access to research, select products, illustrate accumulation and income performance before continuing with the application process.
Cannex’s modeling tools will also allow advisers to test a variety of allocation options under different market scenarios for indexed and variable products, according to the announcement Tuesday.
Luma, which launched in 2011, provides structured-product tools for advisers in the U.S. with approximately 38% market share, according to a company spokesperson. Luma is used by broker-dealer firms, registered investment advisers and private banks to automate the full process cycle for offering and transacting in market-linked investments.
While Luma made annuities live on the platform this month for clients to begin transacting, the new partnership with Cannex marks the first expansion into the annuity product set, said Jay Charles, director of annuities at Luma. There is no additional expense for Luma customers to adopt an annuity offering, he said.
For the experienced adviser offering annuities, the Luma and Cannex product provides more education and research options when making selections during the application process, but those highly experienced advisers on annuities are “few and far between,” said Gary Baker, chief operating officer at Cannex.
“As far as having deep experience around annuities and selling a lot of them, I think this will have even more impact for the advisers that may only sell a few a year, when they’re not as engaged or maybe as knowledgeable of all the new offerings that are happening,” Baker said.
The overall goal of the partnership is to get a broader set of advisers to engage with annuities. “The real question here is: How do we get more financial planners to offer annuities as part of their overall portfolio to clients?” Baker said. “[Annuities] can be complex or intimidating, by breaking that down, I think you’ll find more engagement.”
In fact, the past year provided some scares for people nearing retirement, and financial advisers are addressing concerns about future income in part with annuities, new data from InvestmentNews Research shows.
It’s a product category that RIAs shunned for years, but there are good reasons why they are increasingly receptive to annuities. The insurance products have become much more compatible with RIAs’ compensation models, and they can provide some financial security that their clients are seeking, panelists at the InvestmentNews Annuities in 2021 webcast said.
Nearly three-quarters of independent financial advisers are planning to recommend annuities to some clients this year, according to the recent InvestmentNews Research survey of 400 advisers.
More than half of those who do use annuities in their practices — 58% — said they will likely change product recommendations in 2021, while most indicated they will suggest annuities more often than they did in the past, that report found.
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