A staunch supporter of annuities who is on a mission to get more RIAs to use them is facing off against one of the product’s most outspoken critics in a live debate.
David Lau, founder and CEO of DPL Partners, a commission-free insurance and annuity platform for RIAs, is meeting Allan Roth, founder of the wealth management firm Wealth Logic, to debate the role of life insurance and annuities in investment portfolios. The CFA Society of Los Angeles is hosting the virtual bout (The Insurance & Annuity Debate — A Cage Match Event) Wednesday, Sept. 1 at 3:30 p.m. Pacific Time.
Tickets are $5 for members and $20 for non-members. The debate is scheduled to last one and a half hours.
Amy Born, a senior wealth advisor at Boston Private, organized the title fight of sorts partly for herself.
“I grew up in RIAs so I’ve always been sort of an anti-annuity person. But over the last couple years, with interest rates being so low, I’ve been intrigued with what David’s doing and my purpose for putting this together was also to educate myself on this. I have to say, I can be swayed and I’m open-minded,” Born told RIA Intel.
[Like this article? Subscribe to RIA Intel’s' thrice-weekly newsletter.]
When choosing topics for the CFA chapter’s 2021 Wealth Management Excellence Series, Born found that annuities was a more polarizing topic than others. So, she sought two professionals who were passionate, experienced and capable of a healthy debate spectators would benefit from.
“I guess this is sort of like WWE because they know all the questions that are going to be asked. They know exactly what's coming at them," Born said, a reference to the choreographed professional wrestling.
Lau and Roth are both confident and eager.
“My strategy for the fight is to overwhelm with facts and data. The facts and data are on my side,” Lau said.
Lau welcomed the face-off with Roth, an opponent he respects, calling it a “great opportunity” to clear up misperceptions financial advisors have about insurance and annuities.
For independent, fee-only RIAs who can’t accept commissions, selling insurance and annuities has been complicated. But those products are inevitably a part of helping someone manage their wealth and DPL is making them more accessible. Now might be as good a time as any for annuities, depending on who you ask.
Roth joked he was “deeply disappointed” when he found out he was up against a tough opponent like Lau, and not some pushover.
“David is very, very smart, and very analytical. It's going to be more difficult. Luckily, he’s on the wrong side of the argument,” Roth said.
Roth, a frequent contributor to news media publications and The American Association of Retired Persons (AARP), is also an admirer of Lau and said he would recommend DPL to advisors who insist annuities are right for clients. He will probably never join them though.
“I’m a big believer in insurance and I’m a big believer in investing. I’m also a big believer in not mixing the two,” Roth said.
On the benefits of an annuity’s payments compared to a portfolio of stocks and bonds, Roth said investors should look no further than the balance sheets of insurance companies (which invest premiums in those securities).
Born hasn’t decided if attendees will be able to ask questions at the event.
“We’ll definitely do some polling questions, just to see how much people know about insurance, their level of expertise, and their biases.”
Michael Thrasher (@Mike_Thrasher) is the editor at RIA Intel and based in New York City.