Annuities and how advisors should incorporate them into their practice


Rich Romano is the CEO and Founder of FidX. Rich is responsible for the company’s strategy, vision and growth. Passionate about helping advisors deliver better results for their clients, Rich leads his team to revolutionize the way insurance products are used to meet clients’ retirement goals within wealth management. More information about FIDx is available at

Russ Alan Prince: How do Envestnet Insurance Exchange and FIDx create a truly holistic and unified solution for managing annuities across client portfolios?

Rich Romano: At FIDx, we strive to make annuities a part of every conversation. We create a unique platform experience to evaluate accumulation and decumulation strategies in a total portfolio, enabling finance professionals to create results-based strategies tailored to their clients’ needs. Without a platform like FIDx, annuities are often held outside of the client’s primary portfolio and managed as a separate asset. This makes it more difficult for advisors to illustrate the impact an annuity can have on the client’s long-term success.

Once the contract is issued, the annuity is included in a consolidated report with the rest of the assets. We talk about FIDx as a platform – that’s what it is – but we really see it as a way to let more savers know they’ll have the income and protection they have. need to maintain their lifestyle and create a legacy.

Annuities come in many forms, including variable, fixed, and indexed. For advisors to help their clients understand which type of annuity would be best for them, planning is essential. When clients begin their journey with a financial plan, the end goal is to meet a need for protection, income, or inheritance. This leads to the edge they are trying to get, then the FIDx platform makes the selection transparent by helping them see what products are available to them. Once the contract is issued, the advisor can monitor all aspects of the annuity through the platform.

Our technology also powers the Envestnet Insurance Exchange, which enables advisors who rely on the Envestnet ecosystem to easily access and manage annuity products from high-quality insurance companies in an end-to-end digital experience. end-to-end, without the need to connect to multiple systems.

Prince: What should advisors know about annuities — the pros and cons?

Roman: Annuities are an often overlooked and misunderstood asset class. Annuities are one of the only products that can guarantee retirement income, making them an essential part of a successful retirement plan.

Another thing advisors should keep in mind is that annuities can work in all types of market scenarios, not just periods of volatility. Of course, when markets are volatile, annuities can be a great way to manage downside risk. But newer products, like registered indexed annuities, are designed to take advantage of bull markets and help people accumulate wealth.

We often say this, but people are living longer and better, and are well on their way to outliving their savings. When thinking about how they can secure their future for retirement, guaranteed income is something that will help them get there, and annuities offer that in different ways.

The biggest con around annuities is the stigma. They have always been considered very opaque, confusing and complex. Education is key to helping investors and advisors understand annuities, and FIDx removes many of the process barriers that have existed for so long.

Prince: What additional types of innovative income and protection solutions should advisors offer to clients’ portfolios, and why?

Roman: If there’s anything we’ve learned from the pandemic, it’s how unpredictable life can be and how uncertain situations can seriously affect income and financial security. This allowed advisors to demonstrate their value by offering appropriate solutions to meet clients’ needs in all situations and also prompted new questions from clients about life insurance as well as long-term care. .

There has been a lot of innovation in revenue and planning over the past few years. Registered indexed annuities continue to be the fastest growing product in the segment and we are seeing more and more insurers attaching income benefits to them. Beyond annuities, issuers have become more creative about how income can be derived from life insurance policies. Income from these products often includes a host of tax benefits. Regardless of the product, we believe they should all be reviewed side-by-side so that the advisor and client can together determine the most appropriate income and protection product for their needs.

RUSS ALAN PRINCE is executive director of Private Wealth magazine ( and chief content officer for High-Net-Worth Genius ( He consults family offices, quick-and-rich entrepreneurs and selected professionals.

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