This Product Can Relieve Advisors' 'Heartburn' and Clients' Stress: Kelli Hueler

Old habits die hard — and so do advisors’ negative attitudes about annuities. Many fail to see these insurance contracts as useful tools, even as pre-retirement clients’ No. 1 concern is outliving their money.

But complementing an investment portfolio with a low-cost annuity can be an effective financial solution and a huge stress reliever, Kelli Hueler, founder and CEO of Hueler Income Solutions, argues in an interview with ThinkAdvisor. 

“The advisors who are on their game and have crossed over into recognizing that the transfer of risk for longevity and [an annuity’s] guaranteed income component in a portfolio … will give [clients] confidence,” she says.

A former financial advisor, she founded Hueler Holdings in 1983. Serving the institutional marketplace, the platform is open to plan sponsor clients, advisors and other intermediaries. Hueler’s clients include Boeing, General Motors and Vanguard.

Annuities available are simple to understand (because they’re “stripped down,” Hueler says), have low costs and come with full disclosures, especially those addressing fees.

In the interview, she maintains that the chief cause of advisors’ annuity avoidance is insurers’ ongoing addition of features “to cover a host of concerns” that also add complexity and cost. That comingling of investment strategies and lifetime guarantee “is probably what gives advisors heartburn.”

Still, “advisors haven’t embraced the fact that they can play such a key role in providing access to important annuity types that complement an investment portfolio, rather than buying an expensive product that tries to do everything at once,” she says.

For five years in the brokerage world, Hueler was a financial planner at IDS Life and then a Kidder Peabody financial advisor. After she opened her own firm, she worked to become an authority on stable value research, and stable value analytics and reporting. In 2020, Morningstar acquired Hueler Analytics’ Stable Value Comparative Universe Data and Stable Value Index.

In the interview with Hueler, who has presented at the Wharton Pension Retirement Council and provided testimony before the U.S. Senate Special Committee on Aging, she recommends that clients dedicate a portion of their portfolio to an annuity such as those available on her platform.

Here are excerpts from our conversation:

THINKADVISOR: Why don’t so many financial advisors view annuities as a useful tool?

KELLI HUELER: A lot of it is attitudes toward annuities on the investment side. Advisors haven’t been getting the right message.

The historical attitudes are very negative. The curricula that advisors access to educate themselves should be modified and improved.

Have annuities themselves improved?

The challenge on the retail side is that there are always new [annuity] bells and whistles. That means a fair amount of complexity gets introduced: comingled investment strategies with a [lifetime] guarantee packaged into one.

And pretty soon the cost layers and the complexity become challenging.

I guess that comingling is probably what gives advisors heartburn — and it should.

Please talk more about comingling.

In many cases, [insurers] are trying to create a product that covers a host of concerns; for example, inflation protection along with stability along with growth. That layers on a lot of cost. 

The simpler and more straightforward the annuity, combined with an investment portfolio, the far more efficient. 

Advisors haven’t embraced the fact that they can play such a key role in providing access to important annuity types that complement an investment portfolio, rather than buying an expensive product that tries to do everything at once.

How is your firm trying to help?

We work with advisors all the time with low-cost simplified, straight-up, stripped-down annuities, where there is full disclosure — full fee disclosure.

Our goal is to [take] the least amount of resources out of the portfolio to increase the income as much as we can.

Many lump annuities together as being all the same. Don’t they? 

Annuities are available in lots of shapes and sizes. There are so many ways to have a cost-effective approach.

The more educated advisors can be about what’s efficient and cost effective and what makes sense to their clients, the more they [can help]. 

Don’t advisors acknowledge that annuities can be quite valuable in providing retirement income?

Advisors haven’t yet connected the reality of investors’ concern about how long they’ll live in retirement and the lack of confidence a lot of folks have about sustaining themselves in their lifestyle.

What do older people worry about most when it comes to finances?