The Success of Magnastar

Monday, March 2, 2015

In 2000, M Financial Group launched MAGNASTAR, a multi-Carrier private placement variable life insurance product available exclusively to M Member Firms. Private placement was relatively new to the marketplace and our ability to introduce a proprietary offering served as another example of our leadership and focus on delivering innovative solutions to our clients.

In the 15 years since the launch, the success of MAGNASTAR has exceeded expectations, becoming the most recognized, and reputable, private placement platform in the industry. Activity in 2014 was a significant contributor to this success.

  • The total number of MAGNASTAR cases issued in 2014 increased 55%
  • Assets under management increased nearly 14% to $2 billion

The potential of this unique product for your clients—which is available from John Hancock, Pacific Life, and Prudential, making it the only multi-Carrier platform in the industry—is enormous.

Many clients and advisors appreciate the ease of creating/adding an insurance-dedicated fund (IDF) to the platform. SALI Fund Services continues to be a key player in this differentiation by enabling investment managers to create tax compliant IDFs that can be attached to the MAGNASTAR platform for essentially no upfront cost. SALI has 73 funds (12 added in 2014).

Federal income taxes on capital gains for wealthy individuals and families are nearly 60% higher than they were three years ago, without even considering increases in other federal and local taxes. As a result, wealthy individuals and families interested in tax-efficient investing are increasingly drawn to the benefits associated with private placement insurance programs. At the same time, advisors are increasingly seeking tax-efficient solutions for their clients who face a rising tax environment that presents obstacles for wealth accumulation and wealth transfer. We have the structure, product, expertise, and execution in place to help clients address a multitude of financial, income, and estate tax planning objectives.

Please contact our office if you would like to discuss how private placement may be beneficial for your client’s personal situation.