CANNEX buys financial services consultant

Advisors looking to purchase annuities for clients should soon have access to more tools, thanks to CANNEX’s purchase of QWeMA Group.

The deal came after a year of talks, says QWeMA founder Moshe Milevsky. The two firms initially wanted to work more closely together, but then decided an acquisition was more appropriate.

Both companies serve the retirement income industry. CANNEX provides data and information services, while QWeMA provides educational software and financial consulting.

CANNEX CEO Lowell Aronoff says the acquisition isn’t about preparing to go after a particular competitor, but to fill market gaps. “We just felt that we had more to offer together than separately,” he adds.

Says Milevsky, “We were paying for their data for the last few years, and they had used some of our analytics. Some of the calculators they have on their website were designed by us.”

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Previously on the CANNEX site, advisors could only look at the price of an annuity, but couldn’t see analysis of anticipated prices.

“What we’re hoping is where the prices appear, there will be calculators and engines that will help people make decisions around it,” Milevsky says.

After the acquisition, CANNEX will launch three initiatives:

• Product allocation services to model optimal spending rates and annuity product choices
• Valuation services that will help answer questions such as, “What is my annuity policy worth?” and “Should I turn on my annuity’s living benefit?”
• Historical data and payout indices to support annuity research, product development and personal finance reporting and education

Industry expert Byren Innes says the acquisition makes sense.

“This is a nice marriage,” says Innes, senior vice president and director of NewLink Group. “CANNEX has been leading the [retirement] quotation space for well over two decades. QWeMA’s research models add credence to the value of annuities and how they can be used in retirement.”

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The QWeMA Group was founded by Milevsky, a York University professor, in 2005. He will join the CANNEX board and oversee research activities. Some of those include making historical insurance and annuity price data available to academics worldwide so they can model trends in longevity and insurance.

The historical data may also be used to develop tools for advisors in future, says Aronoff.

Milevsky expects to step away from daily management and will focus more on academic work.

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The new business unit will retain the name QWeMA, and will be led by Faisal Habib, who previously served QWeMA’s COO.