LOUISVILLE, Ky.--(BUSINESS WIRE)--Today, Jefferson National, a market leader in tax-advantaged investing, introduced the JNF SSgA Retirement Income Portfolio to be managed by State Street Global Advisors (SSgA), a global leader in asset management. Unprecedented in the marketplace, this new solution is designed expressly for Registered Investment Advisors (RIAs), fee-based financial advisors and their clients, to help them Unlock Retirement IncomeTM while being tactically managed with Volatility DefenseTM.1
Exclusively offered through Jefferson National's Monument Advisor, the industry's first and only flat-fee variable annuity (VA)2 with substantially lower cost, more transparency and greater liquidity than traditional VAs, the fund gives advisors and their clients an additional way to unlock retirement income, using a combination of three key components that make this fund the first of its kind.
- A portfolio of income-generating ETF investments, managed by SSgA, that seeks to provide total return.
- A tactical management overlay using quantitative and qualitative measures.
- A “Target Volatility Trigger” (TVT) methodology devised to help manage volatility.
Together, these “Three T’s”—total return, tactical overlay and TVT—are the engine, brakes and airbags that advisors need to navigate today’s retirement income challenge.
“Both Jefferson National and State Street Global Advisors have pioneered truly groundbreaking products that have changed the financial services industry,” says David Lau, COO of Jefferson National. “According to our recent Retirement Income Solutions Survey, 71 percent of advisors say the biggest challenge to generate sufficient income is a combination of three key factors: a low yield environment, maintaining adequate equity exposure and managing volatility. We believe that this new fund, combining total return, tactical management and TVT, all wrapped with the low-cost tax deferral of Monument Advisor, is a one-of-a-kind solution to these obstacles. By offering an approach similar to what insurers use to manage risk on their own balance sheets, but with substantially lower fees and greater flexibility, we help advisors and their clients meet an urgent need to generate a stream of retirement income while managing volatility.”
“Volatility exhibits some persistent features and our strategy looks to exploit that persistence," says Chris Goolgasian, managing director in the Investment Solutions Group at State Street Global Advisors. “The goal of volatility management is to enable investors to take on an allocation of growth assets, which are needed to maximize long-term portfolio gains for a retirement that could last 30 years or more.”
SSgA’s TVT methodology, is a rules-based strategy that dynamically adjusts the exposure of assets within a portfolio to target a consistent level of portfolio risk. According to a recent whitepaper by Goolgasian in the Journal of Index Investing3, over the past 20 years, a 14 percent TVT strategy outperformed the S&P 500 benchmark by 73 basis points (bps) per year while improving a number of risk metrics, including lower standard deviation, lower beta and substantially improved drawdowns. This is the first time SSgA’s TVT strategy has been made available in the United States, following a successful international launch.
While roughly half (51 percent) of advisors use VAs with income guarantees to generate retirement income, 52 percent are not satisfied. Further, 53 percent of advisors say their clients also express concerns about these products.4 To help financial advisors make an informed decision, Jefferson National conducted extensive actuarial research on the costs and benefits of guaranteed products, developing a new Retirement Income Comparison Calculator. This interactive tool allows advisors to perform a comprehensive stress test, to compare the hypothetical performance, cumulative fees and lifetime income potential of a traditional VA with insurance guarantees versus a low-cost flat-fee VA.
According to the tool—which runs up to 10,000 Monte Carlo simulations to randomly predict the performance of products based on three decades of market data5—most guaranteed VAs are not generating enough income to cover the cost of their riders. In fact, when looking at a standard retirement income scenario, where an investor accumulates assets for 20 years and then generates 20 years of income, the analysis shows that 89.9 percent of the time, investors will pay more for a guarantee than they will ever receive in income. When using a flat-fee VA in the same scenario, an investor would earn 40 percent more potential income each year, accumulate five times more potential assets and pay 30 percent less in fees.
For more information, please contact Greg Hassel at 212-840-1661 or greg@blissintegrated.com, or Deborah Newman at 502-587-3858 or dnewman@jeffnat.com.
About Jefferson National Financial Corp.
Jefferson National is a leading innovator of tax-advantaged investing solutions for RIAs, fee-based advisors and the clients they serve. Trusted partner to a network of more than 2,200 advisors nationwide, Jefferson National provides greater efficiency, transparency and choice through an adaptable technology platform, award-winning distribution strategy, and cost-effective servicing capabilities. Named the industry “Gold Standard” and winner of more than 30 industry awards, including the DMA 2010 Financial Services Company of the Year. The Company is based in Louisville, Ky., with authority in 49 states and the District of Columbia. To reach our advisor support desk, please call 1-866-WHY-FLAT (1-866-949-3528). To learn more, please visit www.jeffnat.com.
About State Street Global Advisors
State Street Global Advisors (SSgA) is a global leader in asset management. The firm is relied on by sophisticated investors worldwide for its disciplined investment process, powerful global investment platform and access to every major asset class, capitalization range and style. SSgA is the asset management business of State Street Corporation, one of the world's leading providers of financial services to institutional investors.
Important Disclosures:
Asset Allocation is a method of diversification which positions assets among major investment categories. Asset Allocation may be used in an effort to manage risk and enhance returns. It does not, however, guarantee a profit or protect against loss.
Foreign investments involve greater risks than U.S. investments, including political and economic risks and the risk of currency fluctuations, all of which may be magnified in emerging markets.
Bond funds contain interest rate risk (as interest rates rise bond prices usually fall); the risk of issuer default; issuer credit risk; liquidity risk; and inflation risk.
Risk associated with equity investing includes stock values which may fluctuate in response to the activities of individual companies and general market and economic conditions.
Investing in high yield fixed income securities, otherwise known as "junk bonds" is considered speculative and involves greater risk of loss of principal and interest than investing in investment grade fixed income securities. These lower-quality debt securities involve greater risk of default or price change due to potential changes in the credit quality of the issuer.
Increase in real interest rates can cause the price of inflation-protected debt securities to decrease. Interest payments on inflation-protected debt securities can be unpredictable.
Past performance is no indication of future results.
SSgA is not affiliated with Jefferson National.
An investor should carefully consider the investment objectives, risks, charges and expenses of the investment before investing or sending money. The contract prospectus and underlying fund prospectuses contain this information. For a prospectus containing this and additional information, please contact your financial professional. Read it carefully before investing. The summary of product features is not intended to be all-inclusive. Restrictions may apply. The contracts have exclusions and limitations, and may not be available in all states or at all times.
Variable annuities are investments subject to market fluctuation and risk, including possible loss of principal. Your units, when you make a withdrawal or surrender, may be worth more or less than your original investment.
Variable annuities are long-term investments to help you meet retirement and other long-range goals. Withdrawal of tax-deferred accumulations are subject to ordinary income tax. Withdrawals made prior to age 59 ½ may incur a 10% IRS tax penalty. Jefferson National does not offer tax advice. Annuities are not deposits or obligations of, or guaranteed by any bank, nor are they FDIC insured.
Monument Advisor is issued by Jefferson National Life Insurance Company (Dallas, TX) and distributed by Jefferson National Securities Corporation, FINRA member. Policy series JNL-2300-1, JNL-2300-2, JNL-2300-3.
1Volatility DefenseTM is designed to dynamically adjust exposures to maintain a desired target portfolio risk. Based upon a volatility forecast, exposure to certain assets may be higher in periods of low predicted volatility and lower in periods of high predicted volatility.
2Jefferson National’s Monument Advisor has a $20 monthly flat-insurance fee. Additional low-cost fund platform fees ranging from .10%-.35% will be assessed for investors wishing to purchase shares of low-cost funds. See the prospectus for details.
3Targeting Volatility: A Tail Risk Solution When Investors Behave Badly, by Robert Benson, Timothy Furbush and Christopher Goolgasian,
Journal of Index Investing, Spring 2014 Vol. 4, Number 4.
4Retirement Income Solutions Survey, 2Jefferson National, March 2014.
5Stochastic scenarios are generated by randomly sampling 30-day returns from nearly three decades of historic performance (1985 – 2013) for S&P 500 Index and Barclays Capital Aggregate Bond Index.
