An Envestnet feature that’s been teased since at least May 2018 now has an official launch window. Insurance Exchange, a portal integrating wealth management, insurance and financial advice, is entering its pilot phase with financial advisors, the company announced Wednesday. There will be six carriers—Allianz Life, Brighthouse Financial, Global Atlantic Financial Group, Jackson National Life Insurance Company, Nationwide and Prudential Financial—included in the pilot program and there are plans for a broad-market release this June.
“After months of preparation, we’re proud to introduce financial solutions from a well-respected group of insurance carriers,” said Bill Crager, chief executive of Envestnet’s wealth solutions division. “We believe advisors who offer integrated advice to their clients can help them achieve better outcomes.”
Originally slated to be available within the Envestnet advisor portal by the end of the year, the feature’s development and launch was slowed by the complexities of working with multiple insurance carriers, according to conversations with Envestnet employees. Insurance Exchange is backed by Fiduciary Exchange, LLC, which plugs insurance carriers into Envestnet’s wealth management platform, giving advisors access to annuities and other insurance products that can be added to client portfolios.
The tool allows advisors to track the daily performance of annuities and integrate them into asset allocation models. It also makes the account opening, processing and management of annuities easier, supporting both fee- and commission-based offerings. Financial advisors will need an insurance license to introduce insurance products. Unlicensed RIAs should keep an eye out for an Envestnet service called Guidance Desk, which is still in development, that will permit consulting and fiduciary services around insurance products.
Standardization is a challenge that’s presented itself for other insurance portal providers, as well. SIMON Markets, LLC, a Goldman Sachs spinoff, is planning an annuity portal launch before this July. The company has already brought issuer agnostic structured products to market, with its foray into annuities seen by those within the firm as a natural extension.
But creating a “common language” that gives advisors confidence in their comparisons of annuities products presented a challenge for SIMON, similar to that of building a “common language” for the comparison of structured products. “We wanted to build a multi-issuer marketplace to give advisors and their clients the best solutions set, and we want to do the exact same thing for insurance products,” said Timur Kocaoglu, chief operating officer at the firm.
While SIMON is not publicly naming the carriers it will be working with or the clients it has lined up, Kocaoglu did mention that the annuity portal is a way to expand its client base beyond structured product customers. SIMON sells notes through broker networks at Raymond James Financial and LPL Financial.
“We have NDAs out with a number of other carriers,” Kocaoglu said, explaining that Prudential Financial is “the one investor who comes from the insurance space. We're looking forward to working very closely with them.” Prudential is also offering its products on Insurance Exchange. The company did not immediately respond for comment on its participation in either platform.
Morningstar also offers an annuity analysis tool, Annuity Intelligence, which gives its customers a “side-by-side comparison” of contract details and annuity benefit information. Like SIMON, it includes an educational component.
As insurance carriers become more integrated with wealth management portals, advisors interested in providing annuities to their clients should find it easier to compare, manage and provide reporting around insurance products, trends driven by technology’s demand for standardization to enable multiple issuers to be plugged into a common platform.