Readers' Choice Awards 2007

The results are in and the readers have spoken. Boomer Market Advisor undertook its 2007 Readers' Choice Awards survey to call attention to the products advisors are using to address boomer retirement needs. Longevity and income issues as well as rising healthcare costs are just a few of the risks boomer advisors are grappling with. Each winner was singled out for its ability to help advisors help their boomer clients. As is almost always the case, some of the results were predictable, some were surprising, but all were educational.
-- John Sullivan, editor, Boomer Market Advisor magazine

1. Which company has the best marketing and educational material to assist you in preparing for the IRA rollover wave?

Winner: American Funds -- This is the first of three appearances in this year's survey from a company that -- once again -- shows little sign of slowing. Readers singled out Know your IRA options as an example of the superior material the company produces.

"American Funds' material is geared towards relationship building between clients and advisors. We try to explain the concepts behind the recommendations we make and Knowing your IRA options certainly helps. It's really a generic concept piece, but if you need it to explain this level of basic information, you understand the hurdles advisors have to overcome when educating some clients. Yes, it's obviously slanted towards American Funds, but not in an overt way that compromises the information being given. It helps us get the knowledge base up and that's what we're looking for."
-- Reader James Michaud, financial advisor, Michaud Investment and Insurance Services, Fall River, Mass.

Honorable mention: Fidelity -- We weren't at all surprised at the appearance of the Boston mutual fund behemoth in this year's results. At a recent industry event that focused on capturing IRA rollover assets, one speaker presented statistics both before, and after, controlling for Fidelity's market share. Readers like the organized and readable way in which the information is presented.

"It's simple to understand and it appears that they use some sort of fusion format in their educational material; bullet points and that sort of thing that makes it easy to comprehend. I think that Fidelity is a leader in the IRA and income distribution planning, and the quality of the material reflects this. They have great material for clients and fantastic white papers for advisors. It's just top notch and my clients respond positively to it. "
-- Reader Lee Owens, financial advisor, Hampton, Va.

2. From a service and support standpoint, which financial services company makes you feel as if they are a true partner in your business as opposed to trying to sell you product?

Winner: American Funds -- Yes, here they are once again. But who wouldn't want to be in the enviable position of boring people with success. The advisors they partner with certainly don't mind. Superior returns and even better service makes them a perennial favorite with our readers.

"They get right on the phone when I call, no call centers and wasting time by punching in a bunch of numbers. From a wholesaling standpoint, you have to call them to come into your office. They leave you alone and don't but you. Sure, I love their multi-manager approach and low expense ratios, but it's the follow-through on the part of their customer service representatives that sets them apart. If a problem is ongoing, they'll always call to give me updates as to how it's being resolved. "
-- Reader Craig Sjonell, branch manager, AIG Financial Advisors, Scotch Plains, N.J.

Honorable mention: The Hartford -- It's amazing how easy it is to keep advisors happy -- and how often companies mess it up. The Hartford's not one of them, and our readers chose it for a reason that, unfortunately, is somewhat outdated -- common courtesy.

"I don't get hounded by them and I appreciate that. Their Web site is perfectly suited for a professional financial advisor. I can get all the account information I need right from there. But I also appreciate the civility I get, like a thank you when I give them business. I'm a boomer and, ultimately, I still appreciate the little things -- and a thank you note that's actually handwritten in pen is something I remember."
-- Reader Marc Rosensweig, financial advisor, Belcamp, Md.

3. Which company currently offers the most cost-effective and comprehensive long term care insurance?

Winner: Genworth -- The company's simple claims-paying process made it a hit. And with a number of sudden exists from the LTCI business recently, Genworth also has its longevity to thank. From 1974 to 2006, the company paid $3.3 billion in claims on policyholders ranging in age from 37 to 105 years of age. Clearly, a solid track record helps.

"They're a top company in terms of market share. We usually quote a number of different companies for or clients and Genworth is usually the one that's most competitive. But I think one of the most important attributes is that they have staying power. We used to write a lot of business with another company that has since exited the LTCI market, and all these clients are left holding these policies. That's not a concern with Genworth. They're just a very easy company to work with."
-- Reader Diane R. Maloney, president, Beacon Financial Planning Services, Plainfield, Ill.

Honorable mention: John Hancock -- Manulife's acquisition of John Hancock in 2004 continues to pay off. The company is the second largest insurance and long term care provider in the country. Along with Genworth, it was one of the first companies to enter the LTCI business, starting out in 1987. Today, the company touts 850,000 long term care policyholders.

"Here in Indiana, we use the Partnership product. What I've found is that their underwriting department is very easy to work with. They're at least always willing to listen, which is not the case with some of their competitors. If you can support what you're saying with information from doctors, they'll work with you. It just seems like they want my business, and will do what it reasonably takes to get it."
-- Reader Ron Nichter, registered principal, RJF Limited Inc., Pendleton, Ind.

4. Which mutual fund family is effectively incorporating the needs of boomer retirees and pre-retirees into their product design?

Winner: American Funds -- Trying to think of something else to write. Three years of wins in multiple categories doesn't make it easy. Over 40 million shareholder accounts, strong performance in good markets and bad and top-notch customer service means inflows will outpace redemptions for some time to come.

"I love the multi-manager format and their expenses are low, which is important to retirees. And they keep the risk levels down. Everyone wants the most bang for their buck with the least amount of risk, and American Funds is the closest I've seen to getting it right."
-- Reader Robert Eastmann, managing director, E&B; Wealth Management, Boca Raton, Fla.

Honorable mention: Franklin Templeton -- The recent launch of the Templeton Income Fund is meant to address boomer longevity and income issues, and our readers took notice. "When we launched the fund, we knew that people were living longer and that the 50- to 70-year-old segment of the market was the fastest growing segment," portfolio manager Lisa Myers told us. Known for their overseas success, a focus on boomers will only add to the company's momentum.

"I don't jump on the hot, new products that come out. I want to see a track record of superior performance before I'll recommend it to clients. Franklin Templeton goes back 30, 40, 50 years with great returns. That longevity is what my clients want to see."
-- Reader Douglas Bauerband, registered rep, G. Douglas Bauerband Financial Strategies, Toms River, N.J.

5. Which exchange-traded funds are generating the most interest?

Winner: Barclays iShares -- Our readers' perennial favorite. While the mutual fund business struggles with fees and scandal, ETFs continue to gather assets and market share. Barclays is the prime beneficiary, and demanding boomers like the low-cost, transparent and tax-efficient nature of ETF products.

"We use iShares because of their diversification and the types of ETFs that they offer. They seem to very efficient and service oriented. Their big in the ETF space, but they aren't arrogant about it. They're just great to work with."
-- Reader Ray Miller, president, Certified Planners Inc., San Ramon, Calif.

Honorable mention: Vanguard ETFs -- Vanguard edged out State Street Global Advisors for the No.2 spot this year. Low-cost bond and international ETFs are two recent rollouts that attracted readers' attention.

"Vanguard performs reasonably well in all market conditions They offer plenty of choices and as we head towards what looks like the beginning of a down market I'll be looking for more defensive positions and Vanguard can certainly accommodate this."
-- Anonymous.

6. Which living benefit best addresses the income and longevity issues your clients face?

Winner: Prudential Annuities -- American Skandia's newly renamed living benefit took the top spot for the second year in a row. The company's Lifetime 5 product guarantees 5 percent annual compounded growth for the first 10 years, a five percent income stream every year for life and flexibility on when withdrawals can be taken.

"A lot of companies are coming out with niche-type products, but for pure retirement income, American Skandia is the best. The living benefit options are great, but it's the sub-account options that I really like. The insurance is always nice to have, but if I manage the investment right through the sub-account allocations, then hopefully they'll never have to use it."
-- Reader Brandon Crabb, chief executive officer, Crabb Financial Strategies, New Market, Md.

Honorable mention: AXA Equitable Accumulator - After years of struggling with pricing and suitability issues, the continued innovation in the living benefit space is refreshing, to say the least. The addition of a guaranteed minimum withdrawal benefit for life to AXA Equitable's Accumulator series got the attention of readers, who honored it on this year's list.

"I think it's a great benefit, in and of itself, but it's also very easy for the client to understand. It's a very simple, straightforward product. We use the guaranteed minimum withdrawal benefit and the death benefit rider. Clients like to know that if they don't need the money, than at least it's constantly increasing for their loved ones in case anything happens to them."
-- Anthony Tee, T&T; Financial, Monmouth, Ill.

7. Which separately managed account platform best suits your clients' needs?

Winner: AssetMark Investment Services -- In a reversal from last year, AssetMark beat out upstart Curian Capital. Founded in 1996, AssetMark provides services to 1,400 advisory firms and administers 47,000 investor portfolios. Total assets increased form $8 billion to $14 billion since last year's survey, not a bad rate of growth. Genworth's acquisition of the separate account provider raised the company's profile, and our readers took notice.

"I like there process. There third party money management is not a cookie cutter approach. They're flexible and customize to your business and client requirements. They work with UITs, VAs, ETFs, individual stock for the higher end clients. They're flexible in their reporting. They have a great book, The Art of Investing and Portfolio Management" and a boot camp that goes with it. It's not at all about promoting AssetMark. It was probably the most worthwhile industry event we attended last year."
-- Bob Mark Bain, principal, Bain Wealth Management Group, Salem, Ore.

Honorable mention: Curian Capital LLC. -- Denver-based Curian Capital recently passed the $3 billion mark in assets under management. In the four years since inception, the Jackson National Life-owned company distinguished itself with low minimums and fractional share technology. It claims 300 selling agreements, which have resulted in 23,000 accounts. For commentary on the future of the managed account business, read CEO Michael Bell's piece in this month's Broker/Dealer Playbook.

"Curian's a totally Web-based operation, so it's nice not having to deal with the paperwork. I love the technology. There third party money management is top notch. There lower minimums give smaller accounts access to a level of professional money management that they would otherwise not have."
-- Joseph A. Grutto, executive consultant, JAG Consulting Company, Satellite Beach, Fla.

8. What technology platform is the most effective at helping you increase revenue and decrease costs?

Winner: Sage Software's ACT! -- Boomers demand customization in the financial products they buy, as do boomer advisors in the technology they adapt. ACT!'s ability to customize to almost any industry fuels its stellar success, and our readers have made it the advisor CRM of record in this year's survey.

"ACT!'s great from an integration standpoint because it incorporates everything you need from Microsoft Windows, so it works well for PC users. One nice recent add-on was a program that can scan documents directly to the clients file, so it really cuts down on the paperwork."
-- K. Bruce Hawthorne, financial advisor, The Hawthorne Group, West Palm Beach, Fla.

Honorable mention: Morningstar Advisor Workstation -- In a world struggling with integration, Morningstar's Web-based software platform features research and real-time delivery, flexible client reports, portfolio management, goal-based planning, asset allocation tools, hot coffee, free car washes. So we lied about the last two, but if the system can help a client fill out an investment policy statement, it's time for advisors to get nervous. None-the-less, it's a hit with our readers.

"I love Morningstar Workstation for the ease-of-use, and I really love the proposals. For the mutual fund portion of my business, it has everything I need."
-- William Robbins, Vanguard Capital, Boston, Mass.

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