Curian Products in Works Heed Retirement Demand

Curian Capital LLC of Denver, the separately managed account arm of Jackson National Life Insurance Co., is developing a managed account for investors who need their portfolio to produce regular income as they enter retirement.

Chris Rosato, a senior vice president of strategic development at Curian, said the product, to be launched by year-end, will “produce yields by investing in stocks with high dividend payouts on the equity side and on the fixed-income side investing in higher-yielding preferred equity stocks.”

Unlike other portfolios that produce income by increasing a portfolio's exposure to fixed-income products, Curian’s income strategy with the new account will maintain the same exposure to equity, fixed income, international stocks and real estate as Curian’s core portfolio, Rosato said.

“Our goal is not to change anyone’s strategic allocation,” he said. “We don’t want to sacrifice that potential for long-term growth, but we still want to generate income to live off of from the portfolio.”

In February, Curian rolled out a defensive portfolio that provides less downside market exposure, so “instead of taking big swings,” Rosato said, it truncates losses when markets perform poorly.

The company will consider developing additional portfolios and is developing an asset-accumulation product that would guarantee income to individuals during retirement, Mr. Rosato said.

“It used to be that customers had to sell out of their investment products and buy into an insurance product when it came time to decumulate assets in retirement,” he said. “You are starting to see folks that don’t want to get out of their asset management products. They just want the guarantee.”

A handful of wealth managers, including Hartford, Conn.-based Phoenix Companies and Genworth Financial, are already offering investment management products that allow customers to keep assets in their asset management products but use an optional insurance wrapper that provides guaranteed income from that product, Rosato said.

He said that Curian's relationship with its immediate parent company, Jackson National Life, of Lansing, Mich., gives it an edge as it looks to couple wealth management and insurance products.

Curian has been working on the asset-accumulation product for 18 months and hopes to make it available to advisers to sell to their customers by next year, Rosato said.

“We are knee-deep in the research process,” he said. “Right now it is like an MP3 player versus an iPod. There are early players out there offering this product, but we are willing to wait until we can do it right.”