Vanguard To Transfer Variable Annuity Business To Third Party
Jun. 21--Vanguard on Wednesday said it will transfer client service and account administration for the Vanguard Variable Annuity business to Transamerica within the next 12 to 18 months.
Vanguard Variable Annuity contracts will still be guaranteed by the Transamerica Premier Life Insurance Company and, in New York State only, by Transamerica Financial Life Insurance Company. Vanguard will continue to manage the Vanguard Variable Insurance Funds, which are the underlying investments in the Vanguard Variable Annuity. Assets in Vanguard annuities totaled $32 billion as of the end of May 2019. Firm-wide, Vanguard manages more than $5 trillion in assets.
"While insurance-based options can be an appropriate choice for some investors, annuity administration is not central to our long-term product and service plans. We're deepening our focus on our core priorities: delivering industry-leading funds and ETFs, enhancing the client experience, and expanding our advice capabilities," said Karin Risi, Managing Director of Vanguard's Retail Investor Group, in a press release. Vanguard will have a "seamless transition for current annuity holders," the statement said.
"We look forward to working with Vanguard's expert team to transition recordkeeping for this annuity," said Joe Boan, Senior Managing Director for Transamerica's Individual Solutions business, in the release.
Vanguard will also discontinue Vanguard Annuity Access, an online platform. In January, Vanguard banned the purchase of inverse and leveraged funds from its brokerage platform and in February, the company said it is closing VanguardAdvantage accounts due to low adoption and usage. In March, Vanguard also liquidated its Convertible Securities Fund.
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