The FIDx Five: Independent RIAs, Client’s Annuities and Fiduciary Control

Retirement, Annuity, & Fintech Insights 

In this week's edition of The FIDx Five, we see two pieces featuring FIDx leaders, a new top spot in annuity sales, and how inflation is challenging long-held savings and tipping norms.

Independent RIAs, Client’s Annuities and Fiduciary Control
The demand for annuity products presents a tremendous opportunity for independent RIAs to deliver greater value for their clients by helping them find the right annuities to meet their goals. Until recently, offering annuities as part of a fee-based or fee-only practice has been a challenge. The Outsourced Insurance Desk model can help advisors bring annuities to their clients while keeping the assets under their control and management. This insightful article was authored by FIDx Chief Sales Officer, Scott Bowers.  (Scott Bowers, July 29th, 2022, Independent RIAs, Client’s Annuities and Fiduciary Control, Link) 

A New #1 In Annuity Sales
Sales of fixed-rate annuities, along with continued growth of the RILA market, helped New York Life claim the number one spot in overall annuity sales to individuals. The company had a remarkable second quarter with $6.77B in total sales. It’s the most since a different carrier hit $6.87B in Q2/15. New York Life’s sales mix was in line with recent industry trends as sales of traditional variable annuities through the carrier fell 9%. Fixed-rate annuities sales hit $7.73B year to date, up 76% from the year before. (Cyril Tuhoy, August 29th, 2022, What’s Behind New York Life’s Rise to No.1 for Annuity Sales, Link)

The 4% Rule’s Greatest Threat
The 4% Rule has been the go-to answer to “how much can I safely spend each year for my savings to last?” for decades. The mind behind the rule, Bill Bengen, now says that inflation may pose the greatest risk to this long-held theory. In a recent interview, Bengen said, “You get an extended period of inflation and a retiree then has to jack up his withdrawals each and every year and they never come back down to the original level, they are stuck with it. Inflation is a scary thing for retirees and is probably the greatest threat to the future of the 4% rule.”   (Sigrid Forberg, August 25th, 2022, Bill Bengen says inflation is 'the greatest threat' to his 4% rule — is it still the key to making money last in retirement?, Link) 

Here’s a Tip…
Not only is inflation challenging the 4% rule, it’s also taking a bite of tips for service workers – especially for workers at grab and go stores like coffee shops. As the world re-opened, customers were feeling more generous – and appreciative – towards service workers. But faced with a barrage of prompts asking customers to tip anywhere from 15-30% before a transaction is complete has also contributed to tip fatigue. While 20% is still the standard for a sit-down restaurant, takeout tips have dropped to 15.2%, down from 17.2% a year ago according to new data from Toast, a rival of Square. While tipping can feel like a burden, it’s important to remember the average wage for counter workers is $14.34 for full-time workers and $12.14 for part-time workers…including tips. (Jessica Dickler, September 1st, 2022, PERSONAL FINANCE Americans have ‘tip fatigue’ — post-pandemic, diners are less inclined to tip generously for takeout Link)

Q&A Featuring FIDx CEO, Rich Romano
This week Rich Romano, CEO of FIDx, was interviewed by the Private Wealth group of Financial Advisor Magazine. The interview focused on how FIDx helps advisors create truly holistic, unified solutions using annuities and continued innovation in the retirement income and protection space. In the article, Rich makes clear FIDx’s goal, “We create a single platform experience to evaluate accumulation and decumulation strategies in a total portfolio, which allows financial professionals to create outcome-based strategies tailored to the needs of their clients. Without a platform like FIDx, annuities are often held outside of the client’s core portfolio and managed like a separate asset.” Read the full interview here. (Russ Alan Prince, August 29th, 2022, Annuities And How Advisors Should Incorporate Them Into Their Practice Link) 

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