Hedging for Market Risk

Losses that occur near retirement can be especially challenging for retirees who may no longer be able to contribute to their investments to offset those losses.

• Clients who are more risk averse can pursue growth while managing risk with our advisory fixed indexed annuity.

• Clients who are willing to take on more risk for the potential of more return, may want to consider our advisory variable annuity, which invests in the market but transfers some of the risk to Pacific Life due to the unique ability of an insurance company to pool risk when your clients exercise lifetime income options.

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Hedging for Interest-Rate Risk

Many investment advisory representatives are turning from bonds to annuities in the wake of the ongoing low interest-rate environment. Low interest rates also create high turnover in the bond market, which causes significant tax inefficiencies that negatively impact a portfolio. Help hedge for interest-rate risk by:

• Allocating a portion of your clients’ money to our advisory fixed indexed annuity to lock in a minimum guaranteed interest rate with the potential for further growth based on the performance of the index.

• Allocating money to our advisory variable annuity to free clients from interest-rate dependent products in a portion of their portfolio to pursue higher returns.

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Hedging for Tax Risk

If your clients are losing money to taxes on annual gains and frequent trading, consider using our advisory annuities as part of a tax-efficient strategy.

• Ordinary income taxes aren’t due until the time funds are withdrawn, so any money made on gains stays in the investment and compounds over time.

• Your clients are free to actively trade and rebalance investments without the burden of taxes.

• Tax efficiency is important when your clients leave a legacy. Our advisory annuities can help streamline the transfer of wealth using stretch and trust plans that optimize tax efficiency.

• The compounding feature of a tax-deferred annuity can help younger investors who have a longer savings timeline.

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Hedging for Longevity Risk

While it’s great news that people are living longer, it creates the complicated challenge of making sure your clients don’t run out of income. The resources you’ve put in place for them could become exhausted due to market downturns, a low interest-rate environment, illness, or commitment to a long-term care facility. To help hedge for longevity risk, our advisory annuities can provide:

• A guaranteed source of lifetime income.

• The advantage of no contribution limits. If a client contributes the maximum amount to a 401(k) and IRA, additional monies can continue to be saved tax-deferred inside advisory annuities.

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Managing Risk to Help Improve Client Outcomes

Managing risk is one of the most important services you provide your clients. Our advisory consultants are available to help you identify ways to help reduce risk and add value to your clients' portfolios.

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