Issue 2 » Wall Street’s Best Kept Secret

Fractional Life Settlements

Are You Leveraging this Unique Alternative Asset Class?

Brian J. Clark, CRPC, all rights reserved©

3W: I see that Reliant’s slogan is “Bringing Institutional Profitability to Individual Investors.” What does that mean, and who are the institutions investing in assets such as Life Settlements?

Brian: Notable examples would be, Warren Buffett, Credit Suisse, Goldman Sachs and Blackstone. Historically, only institutional investors had access to life settlements because of the large amount of capital and expertise required to do so effectively. But now, thanks to unique legislation here in California, financially qualified investors can now participate in Reliant’s Fractional Life Settlement investment model. That means the individual investor can have the profitability that the institutional investors have.

3W: This really seems like an incredible opportunity. If someone is interested what qualifications do they need to have?

Brian: Our investors need to be financially qualified California residents, per state law, and must generally have a net worth of at least $250,000, excluding their home, vehicles and furnishings. With that said, many of our clients have a net worth far above that. We are eager to help anyone who qualifies add true diversification and return potential to their portfolios, where appropriate.

3W: What led you in your career to Fractional Life Settlements as an alternative investment?

Brian: I worked for 15 years in the world of stocks, bonds, real estate, and the other “mainstream” markets. I kept seeing clients let down repeatedly by those markets. I began to appreciate the concept of alternative investments and non-correlation to the stock market and I saw how large institutions took advantage of these concepts and typically do much better than most individual investors.

3W: That’s refreshing to see an advisor so compelled to continue to advance their knowledge to learn new and better ways to help clients get good returns.

Brian: Well, when I discovered how life settlements have the potential to outperform stocks and other alternative investments, I knew I had found what I had been looking for, and that would ultimately allow me to help clients in a manner like never before.

3W: Let’s talk about fractional life settlements in a nutshell; what are they?

Brian: When an insured senior (usually 65 or older) no longer needs, wants, or can afford their life insurance policy (universal life for our purposes discussed here), they have only three real options:

  • Keep it and let the cost of insurance eat up the cash value until the policy lapses, potentially leaving them nothing.
  • Cash it in to the issuing insurance company for the surrender value.
  • Sell it to a third party, in what is known as a life settlement, often for three to five times what the cash- surrender value is, but for significantly less than the face value.

3W: Can a person legally sell their life insurance policy?

Brian: Yes. The Supreme court legalized it decades ago.

3W: Okay how do life settlements compare with say, stocks that have volatile risk or bonds that may not pay much in terms of yield.

Brian: Fractional life settlements are a compelling long-term proposition and can offer double-digit return potential. According to an 11-year empirical study done by the London Business School, purchasers across their sample could have expected to earn average annual returns of 12.5% from 2001 to 2011, with a low of 11% from 2005 to 2007 and as much as 18.3% in 2011. The study looked at more than 9,000 policies representing more than $24 billion in life settlement policies.

3W: Amazing. Given the uncertainty of the economy and a new administration this alternative investment that is not correlated to the stock market might be just what our readers are looking for. How do you encourage people to look at life settlements and how can they contact you to find out more about this opportunity?

Brian: A great place to start is to look at the worst performing 10% of all your long-term investments, even IRA assets, and consider swapping it out for a 10% slice of Life Shares. If your readers feel they could use some true diversification in their portfolio then please feel free to contact me at (760) 668-5440 or e-mail: and we’ll help you add Life Shares to your portfolio in the right proportions suited for you, as indicated for your own unique situation.

Life settlement investing involves risks.
Read and understand all pertinent documents before investing.

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