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Providing Guidance to Secondary Market Assets
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Secondary Market Annuities

  • What Are Secondary Market Annuities?

  • Benefits of Secondary Market Annuities

  • Original Issue Annuities vs. Secondary Market Annuities

Annuities are financial products that pay out a fixed stream of income to individuals, usually retirees. The money comes from a substantial lump sum or monthly payments put into the annuity during the accumulation phase. Once payments commence at a specified date, the contract enters the annuitization phase.

Secondary market annuities originate from existing annuities that become available for purchase. They offer fixed-term payment streams, up to several decades long, from top-quality insurance carriers.

SMAs could be the right fit for your client’s profile if he or she is looking for above-average returns with relatively low risk. Investors must also have enough resources to tie up funds in this illiquid investment.

SMAs offer many of the same benefits as primary market annuities—including payment certainty and a guaranteed yield—without all the restrictions associated with insurance contracts. While insurance products often translate to low returns for the investor, SMAs routinely provide yields 1-4% higher than comparable original issue annuities at a lower cost and without introducing a high level of risk.

SMAs originate from individuals who purchase annuities as an investment or to help diversify their portfolio. Annuities may also contain lottery winnings or legal settlement payments for damages or personal injury. The income is structured to be paid to the annuity holder in fixed amounts over a long period of time. These payments are funded by top-rated insurance carriers, such as MetLife, New York Life, Prudential, and others.

When the original owners discover they can’t or don’t want to receive the money over time, they can sell their future payments for cash today, totaling less than the face value of their contract. This facilitates the sale and transfer of the annuity, which is what makes SMAs such a good deal compared to other investment products with similar risk.

In simplified terms, the buyer takes over the right to receive future payments from the annuity, a process that usually takes about 10 to 45 days. Behind the scenes, attorneys must perform an extensive legal review and work with the court to approve the transaction. The issuing insurance company must also agree to it, and if the money comes from lottery winnings, the state lottery commission is involved as well.

The Area’s Leading Wholesaler of Secondary Market Assets

Why We Are Different

SMA Hub is far from merely a “middleman” in the process of transferring structured settlement cash flows. We acquire original issue annuities in their entirety using an independent business trust. Then, our experienced, on-staff attorney navigates the complexities of transitioning the financial product into a secondary market annuity.

Only once the review process is complete and the sale of the payment stream has been court-approved do we list SMAs in our inventory. This adds additional layers of protection to your practice and ultimately your clients. By the time you see SMAs for sale on our website, all due diligence has been performed. Therefore, you can expect to close your client’s case within 24 to 48 hours, pending liquidity of funds.

Premier Servicing

Our first-class servicer, GoldStar Trust Company, is the recipient of all incoming benefits directly from the originating insurance carrier. Once your client executes the Irrevocable Assignment, SMA Hub legally forfeits all rights to the future benefits. Utilizing GoldStar’s services allows for the customization of each cash flow to be broken apart in dollar amount or term while maintaining unmatched security for your client’s ownership in either a portion or entirety of the payment stream. It is, for this reason, SMA Hub has the capacity to provide our services to every type of investor, from introductory net worth’s to accredited investors.

While our process allows for streamlined and efficient acquisition of this niche asset, our model also considers the necessity for our clients to offload their purchase in an emergency. Should a client find themselves in a position of illiquidity, they have to option to rapidly sell the remaining benefits back to the Hub at market value.

Our Promise

As a boutique specialty financing firm, we strive to provide white-glove service to all agents and advisors we work with. Our model was developed and has been continuously refined from the feedback and critiques of our trusted partners on the front lines. We look forward to your continued business and exceeding your high expectations of us and our offerings.

A True Wholesaler

Be cautious, several secondary annuity companies claim to be a true “wholesale” distribution provider of SMAs when in reality, the majority of these companies sell directly to retail clients. We believe a true “wholesale” distributor should never be in a position to compete directly against its distribution channels.  Because SMA Hub is a true wholesaler of secondary market annuities, we provide a tried and proven business model in which agents no longer have to worry about their clients circumventing them or being directly marketed to by their “wholesale” provider of SMAs.

Origination of Deals

SMA Hub does not originate secondary market annuities and or compete with its suppliers of factored structured settlements. SMA Hub works with some of the top originators in the market and, as a result, provides files that meet each state’s structured settlement statute requirements.

Carrier Ratings

When purchasing secondary market annuities, we do not just focus on the types of income streams; in addition, we focus on carrier strength. Furthermore, SMA Hub purchases only from only highly rated carriers.

Contact SMA Hub for more information about registering on our website and accessing our inventory.

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Principal Buyer

With each secondary market annuity payment stream, Hub Business Trust is the principal buyer and puts its own capital on the line.

In-Stock Inventory

We have exclusive, quick-close, IN STOCK Secondary Market Assets inventory available for immediate transfer.

Customized cash flows

Our proprietary purchasing model allows purchasers to customize our in-stock Secondary Market Assets income streams by apportioning the cash flow to their needs.

Professional Servicing

With each secondary market assets, we utilize a professional payment servicing provider.