'Annuity Yoda' sees an industry that could be more thoughtful

Long before Tamiko Toland was a go-to annuities consultant, she was in the winemaking business.

But time, as those working in fermentation know, has a way of changing things.

“This business is a lot drier,” Ithaca, New York-based Toland said, noting that parallels between the two worlds are a bit forced. “With opening a bottle of wine, it’s a bit of a crapshoot. With lifetime income, you know exactly what you’re going to get when you open it.”

Her career in vinting was relatively short — she changed things up and went into journalism, which eventually led her to the world she’s embedded in. Toland spent several years as an editor at trade publication Annuity Market News, which was an education in the broad product category. As journalists know, story length can be a useful limiter — or it can prevent writers from geeking out on a subject as much as they’d like to. `

“It just shifted me into a different seat … Journalism is great, but it’s also very limited in terms of what you can do,” Toland said. “I loved doing deep dives and writing long pieces or ones that had lots of elements. I was restricted in my word count by my editors, and I got around that by doing a lot of sidebars.”

HELPING HAND

Annuities are a big business, and demand for retirement income products and services is expected to continue to rise as more baby boomers enter retirement and younger workers plan for sources of financial security. But the retirement plan industry represents a massive untapped potential for insurers. While two major pieces of legislation, the SECURE Act and SECURE 2.0, have encouraged ways for employers to add guaranteed income components to or alongside their retirement plans, uptake has been slow. And as assets in defined-contribution plans like 401(k)s keep growing, there's a lot of potential for annuity sales to go along with that.

Toland, who spent years working at Strategic Insight, Cannex and most recently TIAA, this year opened an eponymous consulting firm.

“There’s so much work that needs to be done to help people understand the solutions that are out there, and that’s a place where I can make a big difference,” she said. “Most of the money in retirement plans still gets rolled over, and the expectation — even with the DOL fiduciary rule — is still that that money will get rolled over. That is a tremendous opportunity to help people with retirement security.”

That shouldn’t just mean more business for insurance companies, which, like other players in the retirement services business, could do more, Toland said. “It’s an opportunity for the entire industry to do a more effective job of serving regular Americans. It’s not like we’ve figured it out already … There are so many ways we can do it better.”

That includes helping financial advisors better understand the range of products and how they can be used throughout the planning process for clients, she said.

A FORCE FOR ANNUITIES

Giving away her level of Star Wars fandom, Toland describes herself as the “annuity Yoda.” Although she saw the original 1977 film about a dozen times during its theatrical release, her favorite is the darker “The Empire Strikes Back.”

And just as there are many installments in that franchise (arguably of varying quality), so too there are a variety of annuities — and Toland wants to be a guiding force for the industry.

“There is no such thing as ‘an annuity,’” she said. “There are more products available for more types of financial professionals. There is a lot more thoughtfulness on the part of product manufacturers to make solutions that fit … [But] we don’t do a great job of helping them understand and further communicate to clients about the value of annuities.”

That isn’t due to a lack of marketing or informational content for advisors — there have been plenty of white papers and webinars.

But Toland, who was head of lifetime income strategy and market intelligence at TIAA, said the material should be more thoughtful, so the volume that's put out there by the annuities market is useful for advisors in their unique practices. “It’s a matter of doing it differently, not more.”