Like a trick-or-treater’s bag, heavy with an assortment of candy at the end of Halloween, this October offered a bit of everything…

Retirement gets social

After first launching a beta version in February 2008, TIAA-CREF made its retirement-focused online community, MyRetirement.org, publically available this month. MyRetirement is one of the broader online communities we have seen to date. Instead of focusing entirely on products, or featuring commentary exclusively from firm employees, TIAA-CREF provides customers with an open platform on which they can discuss retirement, as well as other topics of interest. TIAA-CREF’s decision to launch a beta version of the community was also significant; doing so allowed the firm to seed its discussion boards with user-generated content, meaning that when MyRetirement was officially opened, new users were able to join active conversations. Continue Reading »

We recently came across an InvestmentNews article highlighting new efforts by Merrill Lynch in the area of retirement income planning. Given the current state of the economy (and of investors’ retirement accounts), good planning is now more critical than ever to ensure that clients can retire comfortably - at least, relatively comfortably.

According to the article, the firm is starting a new retirement income training program for financial advisors called Merrill Lynch Retirement Income Framework, which is based on reviewing best practices of advisors across the country. While details of the training program are not provided, the article quotes Aimee DeCamillo, the firm’s head of personal retirement solutions, as saying that the program takes into consideration the risk of clients outliving their assets, inflation, health care costs and planning risks.

Merrill Lynch is also leveraging its connection with Bank of America, according to the article, by setting up a new program whereby clients with at least $250,000 in their retirement accounts can periodically transfer money to a Bank of America deposit account to provide convenient access to retirement income at local branches and ATMs. Clients can give their financial advisors permission to monitor the spending in their accounts to help assure that they remain on track.

Merrill Lynch has been one of the more outspoken firms with regard to retirement income planning for some time now. In fact, we published a research report on Retirement Income Planning almost two years ago, and even then, we highlighted Merrill Lynch as a leader. Despite the focus on retirement income, however, the firm has lacked the robust client-facing tools that we have seen from Fidelity. It will be interesting to see if Merrill Lynch will introduce new online features in conjunction with the new financial advisor push and Bank of America partnership.

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In February of 2007, TIAA-CREF introduced a beta version of their retirement-focused online community, MyRetirement.org, to a select group of clients. Recently the firm rolled the site out to its broader client base through an email invitation.

MyRetirement.org provides a unique outlet for the firm’s clients to discuss a number of topics, including investment and saving strategies, travel and leisure plans, even health and fitness tips. This broad range of financial- and lifestyle-focused content should appeal to the interests of the firm’s unique customer base, i.e., those with backgrounds in the academic, research, medical and cultural fields. Continue Reading »

The big news for September revolves around Roth conversions. In the advisor realm, there was an influx of promotions surrounding the 2010 Roth conversion opportunity. A number of firms in our coverage groups are now supplying their advisors and brokers with new online marketing materials to help get ahead of the competition.

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New legislation set to take effect in 2010 removes the $100,000 MAGI limit for Roth IRA conversions, greatly expanding eligibility. Beginning in 2010, people can convert to a Roth IRA regardless of their income… but many investors may not have even known about it if they relied on information from their brokers alone. We simply have not seen many brokerage firms addressing this issue, until recently that is.

Our Merrill Lynch broker recently sent us an email with a couple of Q&A guides from the firm regarding the expanded Roth IRA conversion eligibility and this is the first time, in fact, that any of our brokers have addressed the issue. The upcoming change is a result of a provision in the Tax Increase Prevention and Reconciliation Act (TIPRA) of 2005.

This is certainly a big deal because Roth IRAs have a number of benefits not available in Traditional IRAs, and with the income restriction removed, many more individuals can take advantage of them. This is something that brokerage firms should promote, since it can be a better retirement savings option for some clients. It makes sense that we have not seen this highted heavily up to this point, since it does not go into effect for another four months. But as we get closer to the end of the year, we expect to see this become more front-and-center when firms talk about retirement savings.

While we don’t monitor third-party account aggregators like Mint, Wesabe and Cake Financial nearly as closely as we do our financial institution coverage groups, we do like to keep an eye on developments among those popular personal finance services. We receive a number of periodic emails from aggregation services where we’ve established accounts - financial summaries, account alerts, new discussions, etc. We had one in our inbox recently from Mint saying how much they’ve missed our visits and encouraging us to check in. While this was definitely not a unique or surprising communication, we found this interesting in light of a few trends among aggregators and financial services in general. Continue Reading »

According to the Alzheimer’s Association, as many as 5.3 million people in the United States are currently living with Alzheimer’s disease, a figure that is increasing every year due to the growing population of elderly people. While the medical field continues to develop new drugs that increase the lifespan of humans, the financial and economic ramifications of a growing elderly population should be considered. Continue Reading »

When the dust settled on a tumultuous first quarter, the writing was on the wall for variable annuity issuers: adapt your product or continue to lose market share to safer, cheaper alternatives. According to LIMRA, U.S. variable annuity sales were down 27% compared to the first quarter of 2008. During the same period, fixed annuities outsold variable products by over four billion dollars, rising a startling 78% in contrast to Q1 2008 totals.

The response from firms was emphatic, resulting in sweeping changes to risky product features as well as the discontinuation of numerous VA products. Hit hardest were the popular VA living benefit riders whose gaudy guarantees became unsustainable as the economic downturn intensified. Continue Reading »

According to an article in the Wall Street Journal, the Obama administration is proposing new taxes for life insurers to the tune of nearly $13 billion over the next ten years. The new taxes would restrict exemptions associated with the purchase of certain insurance products, especially corporate-owned life insurance.

Last week, many of the Nation’s top life insurers were offered access to treasury funds under TARP. Some of the firms applied to TARP several months ago and have since increased capital; therefore they may opt to reject government assistance. While not necessarily related, the timing of the potential tax proposals (falling on the heels of offered assistance) creates an interesting visage.

Having eliminated or scaled back so many benefits and riders already, it will be interesting to see whether or not the fallout from the proposed taxes would target annuity products specifically. Fixed annuity sales have skyrocketed recently as investors and retirees are seeking a conservative retirement vehicle. The proposed tax increases would most likely hurt overall insurance sales; something the insurance industry is likely to fight tooth and nail as it tries to navigate the economic crisis.