Prudential's U.S. life business enters private wealth market

Nov 1 (Reuters) - Prudential Plc (SES: K6S.SI - news) 's U.S. life insurance business Jackson has set up a private wealth and trust arm to manage the investments and finances of very wealthy clients.

Jackson National Life Insurance Company, which provides retirement products and income strategies for clients in the United States, said it had created an investment-only, tax-deferred variable annuity for trusts and private banks.

The Lansing, Michigan-based company said the product could be used by portfolio managers and trust officers to help high and ultra high-net-worth individuals in tax planning.

Jackson said the new annuity was institutionally priced insurance and available as a fee-based service without commissions or exit charges.

Justin Fitzpatrick, head of the new unit, said that since trusts and private wealth firms operate on a fee-only model, many of them haven't traditionally used annuities.

"We're hoping to change that. We believe fiduciaries should have access to the tax deferral and income control provided by variable annuities in a commission-free form that fits their business," he said.

Prudential's decision to focus on high-net worth individuals comes as comments by some U.S. government officials have heightened fears that big banks and insurers will have to downsize dramatically if they are to shake off their "systemically risky" label.

Global consultancy firm Capgemini defines high net worth individuals (HNWIs) as those with investable assets of $1 million or more, excluding their primary residence, collectibles and consumables.

There were 4.8 million such HNWIs by 2016 in the United (Shenzhen: 000925.SZ - news) States, which along with Japan, Germany and China boast the highest numbers of millionaires in the world, according to Capgemini. (Reporting by Noor Zainab Hussain in Bengaluru Editing by Susan Fenton)