In 2012 and 2013, some firms eliminated the option to make annuity contributions for some variable contracts. The ability to add contributions to an annuity and then determine where to invest is a unique capability that allows clients to take control of their retirement investment and to help their future earnings increase. This month’s Annuity Monitor Report examines the capabilities offered by firms in our coverage group that allow clients to add contributions to an annuity and to then set up future allocations to subaccounts. We focused on accessibility, functionality and assistance.
A few of the key criteria analyzed are as follows:
- Where are the transactions to fund an annuity and set up future allocations housed?
- Are clients able to determine how the contributions will be invested?
- Are clients provided with help features that assist with the transactions?
- Are users able to review the information and selections before submission?
In our examination, we found that only two
Annuity Monitor firms allow clients to fund their annuity and set future allocations. Both firms were given the highest grade (A-). The remaining firms allow clients to set up future allocations online. Of the 13 remaining firms, seven received grades within the B range, as they offer adequate future allocation platforms that provide help features and easy accessibility. Finally, the lowest grades were given to firms that could improve significantly in their offerings, including with transaction assistance.
The majority of
Annuity Monitor firms in this report (73%) provide simple navigation to their future allocation capability upon login. Three firms provide easy access to the capability from a
quicklink within a dropdown menu on the private site homepage, while eight
Annuity Monitor firms provide direct access to the capability from a link located on the dedicated contract details page.
A few firms provide user-friendly features within the future allocation platforms, including the option to view investment details. Five
Annuity Monitor firms provide clients with access to detailed information of the listed investment portfolios, including access to view performance data for funds and fund prospectuses. Three
Annuity Monitor firms offer a user-friendly future allocation table, which allows clients to easily sort through their available investment options. All
Annuity Monitor firms covered in this report allow clients to view their current allocation details within the future allocation platform.
Additional key findings include:
- Six Annuity Monitor firms provide a progress meter.
- One firm allows clients to set up a notification of an upcoming annuity contribution and include future allocation instructions.
- Two firms allow clients to choose the allocation method (percentage or U.S. dollars).
- One firm offers pie graphs of the client’s current and future allocation models.