F&G announced a new annuity product category – the Fixed Index-Linked Annuity with the launch of Dynamic Accumulator. The new product is built on a Fixed Index Annuity chassis offering 100% principal protection against market decline, but similar to a Registered Index-Linked Annuity, it also offers increased upside potential and provides customers the flexibility to control their level of risk.
F&G's Dynamic Accumulator gives clients the flexibility to change risk level annually, dialing back to an FIA-like 0% floor or dialing up the prior index gains they're willing to put at risk to unlock more upside potential. It works like a RILA when the market is up and has similar guarantees of an FIA when it's down.
This FILA is designed to meet an underserved need in the marketplace. According to a new F&G survey of American Investors, when considering retirement products, 88% of survey participants say 100% principal protection is important. In addition, 86% of respondents said the ability to shift the balance between upside potential and principal protection is also important, indicating that while customers may be willing to take some risk on any gains, protecting their principal is still a top priority. FILAs help them achieve both.
"We know customers want more options, and Dynamic Accumulator offers an innovative new alternative for accumulation providing both safety of principal and upside potential," said John Currier, President, Retail Markets at F&G. "Our new product serves the same customer needs as a RILA, and we are excited to help define and grow this new FILA category."
The F&G study also highlighted an opportunity for agents and advisors to educate their clients on the benefits of these types of accumulation products, especially among those approaching or entering into retirement. The survey found the following specifically among Baby Boomers (aged 57-75):
Nearly three quarters (72%) of pre-retiree Baby Boomers say they plan to retire within the next ten years but only half of Baby Boomers overall (50%) are currently using a financial professional.
Baby Boomers also cite their two most important objectives when making decisions on retirement products as guaranteed income (53%) and protection against market losses/risk (47%).
Yet only 26% own annuities and only a third (32%) who currently work with a financial professional say their agent or advisor has spoken to them about annuities within the past year.
"FILAs give financial professionals an opportunity to introduce their clients to a product that provides both growth potential and peace of mind," said Ron Barrett, SVP Annuity Distribution at F&G. "Giving customers the flexibility and control to adjust their risk level annually also creates more opportunities to check in with clients to help them develop the best, proactive retirement plan to meet their needs and aspirations."
Dynamic Accumulator is available in 35 states and will be initially sold through F&G's long-established IMO channel.
This F&G Pulse Survey was conducted using Directions Research's Xcelerant Surveys among a sample of 1,335 adults 40 years of age and older who are financial decision-makers for their household with at least $50k in investable assets. This survey was live from May 6-18, 2021. To ensure consistent and accurate representation of the U.S. general population 18 years of age and older, data are weighted by the following Census variables: sex, age, geographic region, race/ethnicity, and education.