And where they have a proprietary variable annuity already, we're talking about a displacement strategy. In the first generation of bank proprietary VAs, she notes, a bank's own mutual funds were usually the only option. As the industry evolved, however, VAs have gotten more flexible, and most proprietary bank VAs now include outside money managers. After all, companies like Allstate have long been wary of alienating their traditional distributors, who are often opposed to banks selling insurance. When Allstate initially assessed the market, it decided that it could be a successful product provider without alienating the independent agents who distribute so much of Allstate's products, says Bruce.
Some analysts seem to think so.
But I think frankly they're a little late to the party. Bruce comments that when she first came to OppenheimerFunds people said the same thing. The firm had entered the bank mutual fund fray too late. The key is to establish relationships with institutions and to differentiate oneself. Yes, there are some 160 carriers that underwrite variable annuities.