There are currently some 18 insurance companies that are offering annuity products, each of them with their own bells, whistles, features and sometimes “gotcha” clauses.

How is a financial advisor supposed to go through that array of products and find the best ones for each client’s investment and retirement needs, especially when many of the products on offer are changing almost every year?

Typically, says Jeff Rosen, co-founder with Chad McCartney of a new advisory service in Atlanta called FAccess, advisers will turn to the annuity wholesalers, who, he notes, are pushing certain products. Or the advisor might have access to a data base, like MorningStar’s Annuity Intelligence, but that is only the starting point for a major due diligence research effort--which has to be done by the advisor.

“Typically,” says Rosen, “we find that a financial advisor will look at two or three annuities before selecting one or two to propose to a client.

That, he argues, is woefully inadequate, and is what led him and his partner--both veterans of the annuity wholesaling business -- to come up with the idea of a fee-based advisory service that could give the full picture about all available products to the advisor.

“We charge advisors a subscription fee,” he explains.  “It’s available for $100/month, 275/quarter or $1000 a year, with discounts for three or more advisors.”  For that amount, he says FAccess, after receiving a completed 22-item client questionnaire  from an advisor, will go through the annuity offerings of all 18 issuers, coming back with an 8-page report that narrows down the best options to three annuities and a recommended choice.

“We decided from the outset that we did not want to be commission-based, either from the issuer or wholesaler side, or from the advisor side,” says Rosen. “That’s been the whole problem. Advisors get their information from the wholesalers, and the wholesalers are receiving 90% of their income from commissions.  We wanted to be able to give absolutely unbiased answers.”

FAccess started up in April, and only has a few advisors as clients at this point, but Rosen says as the business grows, his firm intends to limit the workload of its staff (currently three people).  “We are committed to having no more than 200-250 financial advisor clients per person,” he said.

In addition to providing an analysis when a financial advisor has a new client, he says FAccess provides detailed information about the annuities it recommends, and then follows up with an asset allocation analysis and a program of alerts, letting advisors know in advance when it’s time to consider reallocation of assets, or when a product is coming out of CDSC (contingent deferred sales charge).

“For example,” says Rosen, “we will warn advisors about hidden ‘gotchas’ in a product that they probably wouldn’t notice on their own.”  He gives as an illustration a Lincoln Financial annuity product that that comes with an optional long-term care rider, saying “It’s fine as far as it goes, but there’s a clause that says Lincoln can raise the cost to whatever they want to later on, and the FA might not notice this.”

FAccess also runs a Monte Carlo simulation based upon the Financial Advisor’s client’s needs,  so that the client can be shown not just what the risks of a particular annuity or allocation strategy might be, but what the probability of those risks are.

“We don’t think anyone else is offering a service like this,” claims Rosen.  “We are acting as unbiased advisors to advisors, or consultants to consultants, if you like.”  He adds,  “Right now, most advisors just get their information from the wholesaler who gave them golfballs.”