MSSB adds retirement component to popular unified managed account. In a bid to strengthen its hand in the realm of retirement-income planning, brokerage giant Morgan Stanley Smith Barney (MSSB) has added a fixed-income annuity from insurance company Nationwide to its unified managed account (UMA) program.

UMAs are single-account investment products that feature multi-manager combinations of separate accounts, mutual funds, alternatives and ETFs. Annuities are insurance-company contracts designed to provide payments to the holder at specified intervals, usually after retirement.

Steady flow

"We expect that the ability to combine a UMA with access to guaranteed lifetime income will be viewed by our industry as an important step forward," says James Tracy, head of MSSB's fee-based Consulting Group. Early in 2008, Pershing teamed up with insurance- and investment-product provider Phoenix to put advisors in a position to offer clients multi-manager investments with lifetime-income guarantees. Given the sheer number of boomers out there and the fact that they'll be tipping into retirement for the better part of the next three decades, MSSB, Pershing and other early-movers in the retirment-income arena may be on to something. Boomers account for about a third of the U.S population, and they own about 40% of all U.S. private assets.

An, as a group they're expected to live longer than any previous generation, thanks to higher levels of personal fitness and improving medical care. In 1955 the average retirement age for Americans was 68 and average life expectancy was 72. Now the average retirement age is 62 and average life expectancy has jumped to 80. More starkly, 65-year-old man has one chance in four of seeing his ninety-second birthday; a 65-year-old woman is as likely to get past age 94.

In addition to being long-lived, boomer-generation retirees face rising health costs. Out-of-pocket costs beyond Medicare ranging from $125,000 to $300,000, according to a 2007 estimate by the Employee Benefit Research Institute -- and that's not counting nursing-home expenses.

MSSB is a two-month-old joint venture between Citigroup and Morgan Stanley with about 20,000 registereded representatives. -FWR