Primerica plans to teach its team about annuities

As Primerica Inc. prepares to add a fixed indexed annuity to its platform for the first time, the company faces the tall task of prepping its 82,000 representatives on the complicated savings product. Primerica has teamed up with Lincoln Financial Distributors Inc. to offer the Lincoln New Directions and OptiChoice seven-year indexed annuities to Primerica's target audience of middle-market investors. The rollout is big enough for Lincoln to put together a team to work specifically with Primerica. The insurer also promoted John Chidwick, a divisional sales manager for Lincoln, to national sales manager working with Primerica and its legions of independent-contractor reps, some of whom work part time. Schooling the Primerica reps won't be an easy undertaking. About 15,000 of the company's brokers are Series 6 and 63 certified, that is, versed in mutual funds and variable annuities, and are familiar with the corresponding suitability standards and processes, said Glenn Williams, president of Primerica. But fixed annuities will be new to the remaining brokers who sell insurance products. Those reps now will deal with heightened state suitability standards on indexed annuities. Although the products aren't securities, they are subject to state standards that are similar to what the Financial Industry Regulatory Authority Inc. requires of variable annuities. “It's a large universe of salespeople who have never sold these before, and that's a significant part of our effort: communicating with and managing the sales force,” Mr. Williams said. He added that the firm has a suitability and supervisory structure for insurance sales; it merely will be adding indexed annuities to the mix. The effort will include the use of roadshows and in-person training in conjunction with Lincoln, Mr. Williams said.

LARGE-SCALE TRAINING

Reps also will have to obtain annuity and product-specific training in accordance with suitability rules from state insurance regulators, said John Kennedy, head of Lincoln's retirement solutions distribution. “The training's not going to be a whole lot different [from training given to other distributors], but it's on a much larger scale,” he said. “Instead of being in front of 20 people, you might have 200 to 1,000 people at a time.” Primerica will be able to offer the indexed annuities nationwide in January, according to Mr. Kennedy. Email Darla Mercado at dmercado@investmentnews.com