AXA: Most sales made via third parties

Your March 5 article “Insurers said to steer reps to in-house wares” focused on claims that insurers with…

Your March 5 article “Insurers said to steer reps to in-house wares” focused on claims that insurers with open-architecture platforms are providing incentives to their agents to sell proprietary products.
Parts of the article focused on AXA Advisors, using quotes from unnamed former agents who attempted to link gross-production goals — a common and well-accepted management tool in virtually all sales organizations across all industries — to untoward conduct.
For the record, we note that financial services companies have an obligation to recommend only appropriate products to consumers.
To do that, at AXA Advisors, we offer our financial professionals a high level of training and planning services to enable them to help clients identify their needs, prioritize their goals and implement the strategies that work best for them.
AXA Advisors does use an open-architecture platform, giving our financial professionals access to life insurance, annuities, mutual funds, stocks, bonds, and other investment products and services from more than 100 insurance and investment companies.
As the article noted, a large portion of our sales are in non-proprietary products, and we sell more mutual funds and other investment products than annuities.
That being said, we believe that the array of AXA Equitable [Life Insurance Co.]-branded products is among the best in our industry, and our sales force knows it.
Our products have to be top tier, because the majority of sales of AXA Equitable products don’t come from our own sales force.
Instead, they come from more than 400 third-party firms — firms that by definition are open architecture — including most of the major national and regional securities firms, banks, financial planning firms and brokerage general agencies.
Our products are market tested every day in the open-architecture universe, and they (and we) win on the merits in a highly competitive environment.
For example, according to [the Variable Annuity Research and Data Service], our variable annuity products positioned us as the category leader, after TIAA-CREF [of New York], in the second half of 2006.
In a market that is populated increasingly with copycat ideas, product innovation is a core competency at AXA Equitable.
As just two examples, we pioneered variable annuity living benefits a decade ago and variable life insurance before that.
Our goal is, and will continue to be, to manufacture products that are among the best in the industry and that offer compelling value to clients — an incentive that we are proud to offer to our sales force.
Robert S. Jones
Chairman
AXA Advisors LLC
New York

Editor’s note: The comments of the former AXA advisers went beyond the traditional “gross-
production goals” — one former adviser saying that it would have been extremely difficult, if not impossible, to meet the insurer’s required quarterly dollar amount in gross direct commissions without selling its proprietary VAs. In addition, the article included AXA’s responses to the comments from its former advisers.

There are good products for retirement income
As an investment adviser who has been in the planning field for 22 years, I take strong exception to the Feb. 19 article “Lack of appropriate products for income in retirement seen.”
Many of today’s variable annuities offer consumers outstanding accumulation and retirement income guarantees not previously available.
But in order to get these guarantees, a price has to be paid. The biggest problem is changing the mind-set of ignorant advisers.
Under traditional defined benefit pension plans, consumers had no choice about investments or the income products provided, nor did they have liquidity.
Today, consumers can control all three — but at a price. If people want the guarantees, they are there for the taking.
If they are not willing to pay for them — but instead are willing to risk it all, they can do that, too. That’s freedom of choice.
The good news is that it’s not an all-or-nothing proposition.
Consumers can choose to pay for guarantees on some of the money and roll the dice with the rest.
For some people, that freedom is too much to handle. For others, it creates opportunities previously unimaginable.
Stephen N. Mathieu,
CFP, CLU, ChFC
President
Legacy Financial
Solutions Inc.
Manchester, N.H.