Lincoln Financial Group has expanded its Lincoln American Legacy suite of variable annuities with the exclusive addition of a broad new set of single-managed funds, American Funds Insurance Series – Portfolio Series.
The new Portfolio Series funds may help investors in addressing specific retirement needs, including building savings, planning for distributions, and preserving long-term assets. In addition, these funds can be used either together within an objective-based framework, or individually, depending on various factors, including an investor’s time frame and risk tolerance.
“The American Funds Portfolio Series of objective-based funds has been popular with retail investors, and we believe variable annuity retirement investors will benefit from similar options,” says Brian Kroll, head of Lincoln’s Annuity Solutions business. “American Funds are highly regarded throughout the industry, and they have one of the longest track records in helping investors pursue long-term investment success. Being selected as the only carrier to provide this caliber of single-managed funds, within American Legacy’s suite of variable annuities, demonstrates Lincoln’s ongoing commitment to innovation and underscores American Funds’ confidence in our solution set.”
“Advisors now have the option to help clients gain access to funds similar to these highly regarded retail funds in a tax-advantaged vehicle,” says John Kennedy, head of Lincoln’s Retirement Distribution business. “If an advisor’s client has a portion of a portfolio earmarked for retirement it may make sense to seek tax deferral and other features for some of the funds not immediately needed. Lincoln’s American Legacy suite of variable annuities can help achieve those goals, while providing an opportunity for retirement income.”
According to the US Census Bureau, by 2030, more than 20 per cent of the US population will be over 65. But, according to a Lincoln Survey, “2013 – Expense Challenges of Age 62-75 Retirees,” retirees significantly underestimated the impact taxes would have on them during retirement.
With funds held in a tax-advantaged vehicle, such as Lincoln’s American Legacy, clients are able to keep more assets invested over time and benefit from potential gains. The success that American Funds Portfolio Series has had as a retail investment offering is a positive leading indicator for the American Funds Insurance Series (AFIS) Portfolio Series, which, coupled with Lincoln’s patented i4LIFE Advantage income distribution method, offers advisors a range of options for helping clients develop an effective income distribution plan for retirement.
i4LIFE Advantage is a living benefit rider, available at an additional fee with Lincoln’s variable annuities, designed to provide lifetime income along with the potential for increasing payments during retirement. For non-qualified money, i4LIFE allows for a reduced tax burden by drawing on the principal and gains for distribution payments. These features can help satisfy a client’s need to create a tax-efficient income stream, in addition to legacy planning.
“We are delighted to introduce the AFIS Portfolio Series funds available exclusively for the American Legacy investor,” said Steve Joyce, Senior Vice President of The Capital Group. “We have enjoyed a very special relationship with Lincoln National for many, many years and are pleased to be able to support them in bringing the American Funds investment advantage to the insurance investor.”
American Legacy was founded nearly 30 years ago as a joint effort between American Funds and Lincoln. It is the only variable annuity to offer access to all 28 funds in American Funds Insurance Series. The addition of these five funds continues to reinforce Lincoln’s leading position as the only provider of a single managed variable annuity in the marketplace.
The new American Funds Insurance Series – Portfolio Series, a series of funds-of-funds, includes three managed risk funds that seek to manage volatility and preserve capital during significant market declines, and two traditional funds, all of which include oversight by a committee of senior investment professionals charged with reviewing the funds’ results and ensuring they align with the objectives.