Maya T. Pillai: Absolutely. So, the earlier you invest in a 529, the more that money is going to grow by the time your kids, 18 going to college, and then you can use those dollars, to pay for it, or at least minimise how much you have to pay out of pocket. Or they have to pay out of pocket, which is important. But where Stable Value comes in, for that, is typically we start seeing the investment is Stable Valued around 14, 15 years old, so that you have that principal preservation, which Nicole just addressed. And, you know, we make sure that it's still there when they go to college.
Jim Breen: Absolutely. It's so important, and you know, to provide that conservative platform, that conservative investment platform, conservative opportunity, that's safe opportunity, is so important. Especially maybe in today's day and age where there's a lot of volatility, we have inflation and a lot going on that might make somebody that that is trying to plan 20 years, 15 years into the future, feel comfortable using this vehicle. So, maybe we can talk a little bit about the type of individual that might consider an investment in Stable Value. I know we talked a little bit about the 529 scenarios, but maybe we can go a little deeper.
Maya T. Pillai: Sure. Yeah. So, as any participant joins a retirement plan at an employer when they are first out of college or masters or whatever that might be, you look at your investment options and typically, you get to see the entire suite and you have to decide what do you want to invest in. A lot of employers have moved to a advice model where it says: are you a low risk, a medium risk or a high risk taker relative to your peers? Or what investments they may have in the investment line up. When you are doing that at age 22, your risk tolerance is likely going to be higher. If you survive the great financial crisis in 2008, call it what I'd say had lingering effects until 2014, you would have wanted to be in Stable Value. Unfortunately, there's a lot of folks that weren't and therefore, there was an addition to Stable... There were many dollars that flowed into Stable Value, which benefited the entire industry. But what it really focuses on is the individuals who are getting closer to that retirement age, probably around 45; you might start considering it. Small allocation and it continues to grow by the time you're at the end or nearing like, right before retirement; you would be a significant portion of your assets would be in Stable Value.
Jim Breen: That's interesting, Maya. Perhaps you could discuss Nicole, a little bit about the current landscape. Let's discuss what else is out there right now.
Nicole Brooks: Well, let's Just talk a little bit about assets and Stable Value. At the end of 2021, there was over 900 billion in assets in Stable Value. There are in the market about 15 different investment advisors and 15 different Wrap providers...
Jim Breen: Okay.
Nicole Brooks: ...covering the Stable Value business.
Jim Breen: Interesting. And you know what sets Pacific Life apart, what makes Pacific Life different?
Maya T. Pillai: Great question. Pacific Life's Stable Value team has been in existence since, well, for a very long time; I won't date all of us. But we have had a synthetic product which is the Stable Value Wrap product since 1993. So, we are closing out year 30 of this product here at Pacific Life.
Jim Breen: Wonderful.
Maya T. Pillai: We have managed to retain assets for all of that time and have contracts that have been, that were incepted in 1993. One the things that we have focused on and we feel like is our value proposition is our tenure in the industry alongside many of the other insurance providers who have been in the industry. And what we feel is that our team is has a deep bench in knowing what is going on in the Stable Value world. So, as everybody knows, there's been quite a bit of volatility in the equity market and in the bond market in 2022, and also the last three years; COVID, and the war in Ukraine. I think the big thing is that what we have to offer is stability in that time and participants know that they can keep investing with the investment managers we provide insurance for.
Jim Breen: And that stability is so important. You know, with Pacific Life, our story is so strong; over a 150 years of financial strength and stability founded here in California. So, this 30-year old platform is really based in something strong, something solid with a significant history of financial strength and stability.
Maya T. Pillai: Absolutely. Yeah. One of the things that we feel like gives us the, I guess the edge, is our credit rating and our financial stability. And we certainly make sure that our clients are aware of that.
Jim Breen: Absolutely. Please, Nicole.
Nicole Brooks: I would add that we have a lot of support from senior management; they're very familiar with Stable Value product and very strong relationships with our clients.
Jim Breen: Yeah. And I think that's also, tying it back to what we mentioned at the beginning of this episode, you know, that support. And I think we really have the support from our leadership to forge ahead, to engage new markets, and to innovate and to continue to innovate the way in which we can take care of our customers and our clients. Let's switch gears just a bit here and talk about where Stable Value at Pacific Life is growing. Let's talk a little bit about the current landscape, the current business, and maybe you can provide a little insight into that future.
Maya T. Pillai: Yeah. Absolutely. So, Jim, I started with Pacific Life four and a half years ago, and at that time we had about $22 billion of assets under Wrap, as we call it in the industry. At this point in time, 9/30/2022, we've got $36.6 billion of assets under wrap. So, quite a large increase of assets over the four and a half years. That's a testament to multiple things. One is senior leadership's desire to continue being a mainstay in this business line. Number two is the added support we've gotten for the team. So, our team's grown in size. We have dedicated support services and functional areas to assist with making sure our Stable Value business continues to grow and continues to thrive for the remainder of the industry. What we have focused on over the last four and a half years is really growing our Stable Value asset manager, Stable Value investment manager base. We used to have nine and now we're at 14 Stable Value investment managers. That's a testament to our ability to diversify for the investment manager and really grow our block in conjunction with them growing theirs. Of course, COVID-19 as well as the war Ukraine added dollars because of equity market volatility. But one of the things that we can say is we've got all the right people to keep us growing. The next piece of that is really just how do we grow, and I think, Nicky, you can handle that one.
Nicole Brooks: Yeah. I mean there's exciting things happening right now in Congress. There's in the form of Secure Act 2.0, looking at opening up Stable Value to a broader group of retirement plans and we are watching that closely.
Jim Breen: And that's absolutely right, Nicole. We just actually had an episode that we produced with Seaver Sowers, Pacific Life's Head of Government Relations out there in DC, and he outlined a lot of his thoughts on the Secure Act as well. So, I would encourage our listeners or viewers to head over to YouTube and search Seaver Sowers in the Wave Strength and check that episode out as well. But you know, is there anything else either of you would like to add to the conversation before we sign off?
Maya T. Pillai: Great question. I think that what we want to focus on is Pacific Life has been here a long time. We've continued to deliver on our products, we want to make sure we're putting our best foot forward, and we want to make sure folks are getting the right education about Stable Value as a product line and we'll be here to answer any questions.
Jim Breen: Well, this has been an excellent opportunity. Maya, Nicole, I want to thank you for being here and joining us on today's episode.
Nicole Brooks: Thanks so much, Jim.
Maya T. Pillai: Yeah. Thanks having us.
Jim Breen: Absolutely. And to our audience, I want to encourage you to learn more about what we're doing with The Wave Strength in this thought leadership platform. You can head over to YouTube, Spotify and Audible, search The Wave Strength, and don't forget to hit like and subscribe so you can stay current with the content that we're producing. I also want to encourage you to head down to the comments and let us know what you think about this episode or ask any questions that you might have for our Stable Value team. Thanks so much everybody and have a great day.
Voiceover: This has been another episode of The Wave Strength presented by Pacific Life. Don't forget to catch us on YouTube and make sure to subscribe. Although this podcast is presented by Pacific Life, the opinions and views expressed are those of the hosts and participants and do not necessarily reflect Pacific Life's views on any of the topics discussed. Pacific Life refers to Pacific Life Insurance Company, (Newport Beach, California) and its affiliates, including Pacific Life & Annuity Company. Insurance products are issued by Pacific Life Insurance Company in all states except New York and in New York by Pacific Life & Annuity Company. Product availability and features may vary by state. Each insurance company is solely responsible for the financial obligations accruing under the products it issues. Pacific Life Stable Value is a group fixed annuity issued by Pacific Life Insurance Company (Newport Beach, California). Pacific Life Insurance Company does not solicit business in the state of New York, nor is it authorized to do so. This material has been provided for informational purposes only. It is not an offer or solicitation to buy an insurance product or security. This material should not be construed as investment advice or be used as a primary basis for any investment decisions. This material has been prepared for by Institutional, sophisticated and/or qualified investors. This material may not be shared, distributed or in any way otherwise reproduced. This podcast was recorded on November 4, 2022.
Jim Breen: Thanks for joining us on today's show. We'd love to hear from you. Join the conversation below and leave a comment on your thoughts on what the industry can do better for participants as it pertains to lifetime income solutions. And if you'd like, more interesting content, click one of these links over here.