Toronto-based financial data provider Cannex Financial Exchanges Ltd. has introduced annuity and retirement income educational tools designed to enhance advisors’ financial planning processes when serving their client’s retirement income needs.
The suite of income annuity analysis tools includes what is believed to be an insurance industry first: the instantaneous generation of personalized, video-based illustrations using a client’s unique profile data and choices, such as the type of income annuity contract being considered.
The tools are available to advisors through Cannex Retirement Income Product Exchange (RIPE), which enables advisors to price- and feature-shop from among hundreds of fixed deferred and income annuity products. RIPE is used by dozens of life insurers and is available to more than 200,000 advisors in the United States and Canada.
“We designed these tools to be simple, easy to understand, and customizable for each client with the goal of helping advisors make income annuities more understandable to consumers,” says Lowell Aronoff, CEO of Cannex.
“Each of the tools addresses a common question that consumers have about income annuities which advisors often have difficulty explaining,” he explains.
“By drawing on longevity statistics that are specific to the individual consumer and using real time market data, these tools eliminate guesswork and provide advisors with the ability to explain how income annuities often can help optimize their clients’ retirement income portfolios,” Aronoff says.
“Choosing the right annuity can be a confusing process for many consumers and even for some of their advisors, so anything that can be done to supplement advisors’ existing planning processes is a valuable addition to the industry,” says York University Professor Moshe A. Milevsky, and CEO of the QWeMA Group, whose research will be used to power some of these tools.
The initial set of questions that the tools help advisors and their clients answer are:
> Should I Buy an Income Annuity?
This tool shows the benefits and trade-offs of including an income annuity in a retirement income portfolio.
> When Should I Buy An Income Annuity?
Using a concept called the Implied Longevity Yield, this tool measures the yield a client would need from an alternative investment over time to equal the income generated by an income annuity. This can help the client determine if they should buy an income annuity now or wait.
> What is My Return With an Income Annuity?
With the help of a graph, this tool helps advisors explain the rate of return from an income annuity over time by relating it to an actuarial estimate of a client’s longevity.
> What Type of Income Annuity is Right for Me?
This tool examines the trade-off between the type of beneficiary guarantee selected for an income annuity and the amount of income generated, helping advisors and their clients decide how much of a guarantee they need.
In addition to creating customized paper-based illustrations and education materials, the Cannex system simultaneously creates a video that incorporates a client’s profile and product choices. The video takes a multimedia approach to explain the advantages and trade-offs of the client’s selections in easily understood terms, using helpful graphics.
For more information about Cannex and its tools, visit www.cannex.com.