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21 November 2019

What does the future of financial advice look like?

By Corey Walther

Allianz Life and the Black Diamond Wealth Platform have partnered to make it easier for advisors to incorporate annuities into their retirement strategies. This is possible through a direct data feed which enables advisors to view and report on Allianz annuity information within Black Diamond. In this guest post, Corey Walther, President at Allianz Life Financial Services, shares the importance of annuities and technology’s role in creating comprehensive financial plans for your clients.

Our industry is in the midst of a significant transformation. New tools, technologies and products are changing the landscape for both clients and advisors. Thanks to platforms and tech solutions like the Black Diamond® Wealth Platform, siloed products and solutions can now be integrated and viewed holistically.

This convergence of traditional and digital advice, modern product design, aggregated data, and technology enabled solutions helps your clients visualize their financial well-being, while building and protecting their financial assets up to and through retirement.

This is vitally important as the typical investor has a piecemeal retirement plan, often with no overarching strategy. Created with good intentions and diversification in mind, investor households may have multiple accounts, both taxable and tax-advantaged, with products often purchased from different advisors and with virtually no coordination.

Having this type of approach potentially opens individual investors up to detrimental tax implications in retirement if not managed correctly. Not to mention, they may also expose themselves to retirement risks associated with market volatility, interest rate fluctuations, inefficient sourcing and sequencing of withdrawals, rising costs (including health care and inflation), and longevity.

So how can you create comprehensive, household-level strategies that pull together these disparate products and plans while also addressing retirement risks? One potential solution is in moving to a wealth management approach that leverages the modern design of investment and insurance solutions – at both product and platform levels.

Your deep knowledge combined with the scale and risk management capabilities of an insurance company can help fill those gaps, differentiate you from commoditized investment planning, to help improve financial outcomes and overall client confidence.

The rising number of people approaching and in retirement, paired with the decrease in traditional lifetime income sources like pensions, means you may be increasingly looking to financial products that offer guaranteed lifetime income – like annuities. But these aren’t your grandfather’s annuity solutions. New product designs, like fee-based product options, lower cost structures, flexible designs, and modern withdrawal benefits are making annuities an attractive solution that can fit into your client’s holistic financial strategy.

Modern annuities address many of the challenges that your clients can face as they prepare for retirement:

  • Varying levels of asset protection with direct or indirect market exposure to help reduce portfolio volatility, without introducing new risks often associated with other alternatives.
  • Guaranteed lifetime income that can supplement or defer the need for Social Security, and take pressure off other assets in the portfolio.
  • Opportunities for increasing retirement income (after payments have begun) to mitigate the impact of rising costs. The opportunity for increasing income may be available through a built-in or additional cost benefit rider.
  • Tax-deferred accumulation for clients who’ve maxed out contributions to qualified plans and want to reduce capital gains taxes.

 

What’s more, annuities can now be managed, billed and reported along with other assets in the portfolio, connecting all investments, products and capabilities. This creates a comprehensive and coordinated platform that provides true scalability as well as a better client experience.

The recent integration of Allianz Life Insurance Company of North America annuity data within Black Diamond is a perfect example. You now can access real-time values from the entire portfolio of existing Allianz Life fixed and variable annuity contracts, and see exactly how an annuity can complement your client’s holistic financial plan.

The future of advice lies in the unique combination of traditional advice with new technology and solutions to help coordinate and optimize the products, accounts and holdings that make up your client’s household portfolio. Not only can this help you manage a client’s important life changes and the evolving complexity of their financial situation, but it can also help you to improve your client’s financial outcomes, and help them prepare to live their life to the fullest leading up to and through their retirement.

To learn more about Allianz Life, visit: www.allianzlife.com/RIA.

 

Annuity guarantees are backed by the issuing insurance company. Variable annuity guarantees do not apply to the performance of the variable subaccounts, which will fluctuate with market conditions. Annuities are issued by Allianz Life Insurance Company of North America. Variable annuities are distributed by its affiliate, Allianz Life Financial Services, LLC, member FINRA, 5701 Golden Hills Drive, Minneapolis, MN 55416-1297. 800.542.5427 www.allianzlife.com Neither Allianz Life Insurance Company of North America nor Allianz Life Financial Services, LLC are affiliated with Black Diamond.