Strategic collaboration with BlackRock creates a new annuity product category – capturing trends in fee-based advice and passive investing
RADNOR, Pa., February 24, 2017 – Lincoln Financial Group (NYSE: LNC) today announced the launch of Lincoln Core IncomeSM, built with iShares, the industry’s first ETF-only variable annuity designed to help fee-based advisors address their clients’ retirement income challenges.
Developed through a strategic collaboration with BlackRock (NYSE: BLK), Lincoln Core IncomeSM, built with iShares features an investment selection comprised entirely of ETFs, providing advisors and their clients with a cost-effective strategy, and guaranteed lifetime income equal to 4% of the initial deposit that increases annually by a 2% cost of living adjustment.
This solution captures the opportunity in fee-based advice and the momentum of ETFs – allowing advisors to help their clients secure retirement income through a guaranteed lifetime income strategy that increases each year.
Transition to fee-based models
“We’re seeing a tremendous shift take place in the advisory space, as more advisors transition to fee-based models,” said Salim Ramji, head of BlackRock’s U.S. Wealth Advisory business. “These advisors are looking for simple, transparent solutions that provide their clients with income. Through our collaboration with Lincoln, fee-based advisors can now offer their clients an ETF-based annuity option to help meet lifetime income goals in retirement.”
According to Cerulli , passive investing is growing at a faster rate among advisors than actively managed assets. Advisors expect this trend to continue, estimating that more than a third of their client portfolios will be in passive allocations over the next two years. Morningstar shows that passive ETF assets have grown from just $228 billion in 2004 to $2.53 trillion as of the end of 2016 .
“Incorporating standalone ETFs into variable annuities is an innovative development; the low expense ratios of ETFs may offer an advantage compared to the cost of other options available, and offer both advisor and consumer value,” adds Bing Waldert, Head of U.S. Research at Cerulli.
Lincoln Core IncomeSM, built with iShares combines Lincoln’s 50 years of experience developing annuity solutions with BlackRock’s iShares portfolio construction and investment management proficiency. Several notable features include:
- No surrender charge;
- Costs all in < 1.9%*;
- Guaranteed lifetime income equal to 4% of the initial deposit that increases annually by a 2% cost of living adjustment;
- Underlying investment options comprised entirely of iShares ETFs; and
- Return of investment death benefit.
*reflecting contract charges and investment option waivers.
BlackRock is customizing a version of its iRetire® digital retirement planning tool available to financial advisors who wish to explore certain features of Lincoln Core IncomeSM, built with iShares with their clients. Over 75,000 advisors who embrace the growing demand for digitally enabled advice have access to the iRetire® tool which offers guidance on building client portfolios that help support lifetime income in retirement. With this customized version of the iRetire® tool, advisors will be able to see the potential benefits of adding guaranteed lifetime income into their clients’ financial plans.
“Retirement savers face significant challenges in today’s environment, given demographic trends and the fraying of traditional government and corporate safety nets. Today, annuities can help savers create predictable lifetime income in retirement,” added Fuller. “Fee-based annuities present a significant long-term growth opportunity and we expect this product to help capture the shift toward passive investing – providing fee-based and registered investment advisors with a solution that can help their clients address income needs in retirement.”
Variable annuities are designed for retirement and offer lifetime income, tax-deferred growth and death benefit protection for loved ones. To decide if a variable annuity is right for you, consider that it is subject to investment risk, includes costs, and all guarantees – including those for optional features – are subject to the claims paying ability of the issuing company.
This press release is not an offer to sell these securities and is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.
About Lincoln Financial Group
Lincoln Financial Group provides advice and solutions that help empower people to take charge of their financial lives with confidence and optimism. Today, more than 17 million customers trust our retirement, insurance and wealth protection expertise to help address their lifestyle, savings and income goals, as well as to guard against long-term care expenses. Headquartered in Radnor, Pennsylvania, Lincoln Financial Group is the marketing name for Lincoln National Corporation (NYSE:LNC) and its affiliates. The company had $229 billion in assets under management as of December 31, 2016. Learn more at: www.LincolnFinancial.com. Find us on Facebook, Twitter, LinkedIn and YouTube. To sign up for email alerts, please visit our Newsroom at http://newsroom.lfg.com.
Lincoln Financial Group® affiliates, their distributors, and their respective employees, representatives, and/or
insurance agents do not provide tax, accounting, or legal advice. Please consult an independent advisor as to any
tax, accounting, or legal statements made herein.
Variable annuities are long-term investment products designed for retirement purposes and are subject to
market fluctuation, investment risk, and possible loss of principal. Variable annuities contain both investment and
insurance components and have fees and charges, including mortality and expense, administrative, and advisory
fees. Optional features are available for an additional charge. The annuity’s value fluctuates with the market value
of the underlying investment options, and all assets accumulate tax-deferred. Withdrawals of earnings are taxable
as ordinary income and, if taken prior to age 59½, may be subject to an additional 10% federal tax. Withdrawals
will reduce the death benefit and cash surrender value.
Investors are advised to consider the investment objectives, risks, and charges and expenses of the variable annuity and its underlying investment options carefully before investing. The applicable prospectuses for the variable annuity and its underlying investment options contain this and other important information. Please
call 888 868 2583 for free prospectuses. Read them carefully before investing or sending money. Products and features are subject to state availability.
Lincoln variable annuities are issued by The Lincoln National Life Insurance Company, Fort Wayne, IN, and distributed by Lincoln Financial Distributors, Inc., a broker-dealer. The Lincoln National Life Insurance Company does not solicit business in the state of New York, nor is it authorized to do so.
Contracts sold in New York are issued by Lincoln Life & Annuity Company of New York, Syracuse, NY, and distributed by Lincoln Financial Distributors, Inc., a broker-dealer.
BlackRock Investment Management, LLC acts as sub-adviser to Lincoln Core IncomeSM.
IMPORTANT: The projections or other information generated by the iRetire tool (the “tool”) regarding the likelihood of various investment outcomes are hypothetical in nature, do not reflect actual investment results and are not guarantees of future results. Results may vary with each use and over time.
Any information contained in or generated by the tool should not be construed as or relied upon as investment advice, research or a recommendation by BlackRock Investments, LLC or any of its affiliates (collectively, “BlackRock”) regarding the use or suitability of any particular asset allocation, fund or overall investment strategy. The tool is designed to be used in consultation with an advisor and should not be relied on as a primary basis for an investment decision. Only an investor and his or her advisor know enough about the investor’s circumstances to make an informed investment decision.
The tool does not guarantee future income or protect against loss of principal. There can be no assurance that an investment strategy based on the tool will be successful. Any decision regarding whether and how to implement a portfolio is solely an advisor’s decision in consultation with the client.
BlackRock is not affiliated with Lincoln Financial Group® and its affiliates.