Decades-old stench of annuity sales and deception hangs heavy, but very 2018 efforts by DPL, Nationwide, Allianz and others offer whiff of hope of cracking the RIA market

As RIAs kick stockbroker butt, old-line insurers like Nationwide are taking the RIA fee-based and open-architecture model seriously -- because they have to -- and target the $2 trillion fixed-income aspect of RIA portfolios.

Brooke's Note: It is surprising on one level just how much RIAs cringe at the word "annuities." After all, no other product short of an old-line defined benefit program provides the kind of sleep-at-night income security of one of these much maligned products. The problem, of course, is that the price has simply been too high and sometimes way, way too high. And though the benefits of annuities are supposed to span years or decades, the advisors who deliver them pay attention to the clients, notoriously, only until the ink is dry on the contract. The contract is often an object lesson in small print and the widow who buys it has as much chance of winning as playing the slots in Vegas. We have been told for at least the past 15 years that all this was changing. For RIA journalists, it was Lucy with the football, though firms like Ameritas and Jefferson National carved out respectable niches. Now a prolonged new push (led by Jefferson National alums at DPL), new signings and a new tone from the protagonists are giving Jan Stenerud new confidence that the ball will stay still for a kick. It can't hurt that the aging bull market is making every RIA wish, on some level, it had more client assets in annuities right about now. "It's not easy to design and implement an income strategy for a client, and I think they see bringing insurance into the fold as a way to enhance their value proposition to their client," says Corey Walther, senior vice president of distribution and relationship management at Allianz. Very true.

The life insurance and annuity industry is making its biggest-ever press to conscript a whole new kind of sales force -- RIAs -- to sell its complicated products after brokers failed to drive new growth.

Most recently, between June and August, Allianz Life closed deals to sell its insurance and annuity wares through three separate RIA-focused resellers, DPL, RetireOne, and most notably, Envestnet, which joined the insurance reselling game in May.

Minneapolis-based Allianz also signed a data-agreement with RIA software stalwart Orion Advisor Services, and invested in 401(k) robo-TAMP Vestwell.

But it's not just Allianz that is taking steps to raise its RIA profile.

On Apr. 25 San Carlos, Calif.-based up-market robo-advisor Personal Capital agreed to manage the technology side of a deal to assign investment options built by $551 billion AUM (as of Sept. 13) New York insurer Alliance Bernstein through Lincolnshire, IL.-based benefits giant Alight Solutions, which has a number of Fortune 500 firms on its books.

Nationwide is giving Jefferson National a needed boost by lending its top-tier brand. See: Nationwide buys Jefferson National under purported DOL duress but 'good private equity' and good planning may rule the day

Even Vanguard Group is making a play.

Meanwhile, DPL Financial Partners is making its own play from Louisville, Ky. to upend the whole category by creating a supermarket of vetted no-load products from multiple providers.

"I don’t believe any of these moves independently are major. What is major are the moves as a collective. Allianz is clearly placing a lot of focus on becoming a big player in the RIA space," says David Lau, founder and CEO of DPL. He is former chief operating officer of Jefferson National, a pioneer in RIA annuities.

Lau adds that it's not as if the insurers are pro-commission, given that they don't receive them under most circumstances -- the broker does.

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