In the recent article titled Lifetime income: from skepticism to adoption HUB’s Kim Cochrane and Jim O’ Shaughnessy got a chance to share their thoughts on the recent proliferation of guaranteed lifetime income products in the retirement and private wealth sector.
This article discusses how the push for guaranteed lifetime income products may have been too fast initially. Covering how many advisors, plan participants and plan sponsors are confused or wary of the product at this point. The importance of education, patience, and excellent communication was highlighted as key ways we can move from skepticism to adoption. Kim, senior director of client services for HUB’s Mid-Atlantic region shared her opinions on the idea.
Stating that down the road the solution may prove helpful, but that as of now she was skeptical and wanted to be sure that any solution she introduces is right for plan sponsors and participants. Jim, President of HUB Retirement and Wealth Management – Northbrook, had a similar view stating that there is still a lot of knowledge, legislation, and regulation work left to be done before guaranteed lifetime income products become a permanent solution.
“Start with non-annuity terminology. We don’t need complexity. We want something understandable off the shelf to the employee, committee and advisor. A solutions provider needs to say what this solves, which is a pension-like distribution. Forget the rates, loyalty bonuses etc. Keep it simple and we will be able to communicate the value.”
– Kim Cochrane, Senior Director of Client Services for HUB’s Mid-Atlantic Region
“The industry is working through these issues at the plan sponsor level, but there is a way to go from legislation and regulation and understanding of potential litigation issues to product and communication. We are having second, third and fourth conversations with plan sponsors. While early adopters have moved forward, we have to work to overcome old perceptions of retail annuities.”
– Jim O’ Shaughnessy, President of HUB Retirement and Wealth Management – Northbrook
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