Flourish Technologies, best known to date for its popular cash management technology, Wednesday announced what it is calling "Flourish Annuities," its new platform for RIAs to provide clients access to fee-based annuities, which has been two years in the making.
Two multi-year guaranteed annuities are the first such products available through the platform marketplace—with other offerings to be added—one from Flourish parent company MassMutual (its Ascend offering) and another from carrier Aspida Life Insurance Company.
“We’ve always said we are going to eventually bring the world of insurance into how we serve advisors,” said Flourish president Ben Cruikshank, noting that he and the company understands the skepticism and confusion that are often associated with the history of annuities.
“There are a lot of people that remain rightly skeptical of annuities and we are never going to say they are right for everyone—but what we will say is that you, as an advisor, should have access to the best products for your clients,” he said.
For advisors that have come to see annuities as useful, especially RIAs, there has been no shortage of roadblocks in the way toward their use. From the sheer complexity of the products, to licensing requirements and the expertise needed to perform due diligence on them, among others.
“Back in early 2020, a sophisticated RIA shop asked us about MYGAs, and they noted that these products were outperforming a lot of comparable fixed rate, fixed term products—but that they just didn’t fit it in the RIA landscape because of administering them—and that was really when we started thinking about annuities,” Cruikshank said when asked about the product category being an unexpected one for Flourish to tackle.
The challenges that needed to be tackled, he said, were not all that different than what the company faced in launching its Cash and Crypto offerings.
Three components needed to be addressed: 1) a marketplace for fee-based annuities; 2) an outsourced insurance desk or OID (which, broadly speaking he said, takes the selling and managing of an annuity off the plate of an RIA); and 3) an order entry and management platform built from the ground up for RIAs.
“As for the marketplace we are starting with MYGAs but not with 20 carriers each with 20 different products and I stress the word marketplace, no one will have an advantage,” he said in terms of the competitive landscape and site placement when asked if they were all going to be products from MassMutual.
“We will continue adding products and carriers over time,” reiterating Flourish’s role in acting as an OID vetting the products and alleviating the need for advisors to become licensed insurance brokers.
“No one has rebuilt the core annuity purchase process and order entry process from the perspective of the RIA, and it is still often truly the world of PDFs and wet signatures,” said Cruikshank.
“So, what you can envision with what we’ve built is an advisor clicks a button and you bring in all the client’s info to pre-fill the application,” he said. And the digital application process goes on to eliminate a lot of the complicated manual processing and paperwork of the past.
It can then take the client and advisor specifications and match, in automated fashion and then straight through to carrier processing and on through digital payment.
Asked why none of the major, and often massively large, insurance carriers and annuity providers out there have yet addressed this challenge, Cruikshank responded matter-of-factly.
“This is not the strong suit of insurance carriers, not something insurance carriers have wanted to invest in, especially investing in order entry and management systems for an RIA market when it is good enough for the agent, broker model that exists now,” he said.
To be sure, Flourish is not the first company or technology provider to try and address annuity challenges for RIAs, but the scope of its offering is comprehensive.
Various insurance exchanges and marketplaces have been launched over the last five years powered by DPL Financial Partners, FIDx, Luma Financial Technologies and others.