Welcome to the first edition of Illuminations, brought to you by Luma Financial Technologies.

Our goal with this newsletter is to keep you informed on the latest financial and technology trends changing the financial advice marketplace. Our end game is to help you take advantage of alternative investments software to create a competitive advantage and drive your growth. We hope you enjoy Illuminations, and we welcome the opportunity to discuss these and other ideas on your journey to growth and success.

Industry Insights

Tim Bonacci, founder and CEO of Luma Financial Technologies

The Rise of Retirement Income and Demise of 60/40 – Now What?

We’ve all seen the Census Bureau data: by 2030, all Baby Boomers will be 65 years old or older. That’s a massive pool of assets focused on generating retirement income from a cohort that grew up on the fundamental belief that the 60/40 portfolio is an ideal way to generate risk-managed growth and income through diversification.

Reports of the demise of the 60/40 strategy may be exaggerated, but there’s no question it’s proving to be less and less reliable. With the rise of assets focused on diversification and generating retirement income, advisors are increasingly turning to alternatives and annuities as allocations shift to a broader 60/20/20 approach.

The marketplace for alternatives and annuities is expanding and changing at blinding speed. The question is: How do advisors find the alternative or annuity that’s right for each investor, as every client has different risk tolerances and needs and every product seems to be different and complex?

Enter Technology: To Compare Is to Know

We all know what comparison shopping is – we do it all the time and some of us do it several times a day depending on our spending habits. Merriam Webster dictionary defines comparison shopping as: “to compare prices (as of competing brands) in order to find the best value…”

That may be true when buying a car or refrigerator, but when it comes to complex investment products like alternatives and annuities, comparing goes well beyond finding the best price – it’s all about finding the right features and fit to solve for an investor’s unique challenges.

Enter technology. For advisors to best serve their clients and make the most appropriate product choice, you need alternative investments software that can give you a clear, apples-to-apples comparison of different alternatives and annuities.

The best investment product comparison tools need to be:

  • Easy to use
  • Show the entire market of available products – because what’s missing might be the best choice for you
  • Go far beyond price comparison and compare features and benefits – and this means a platform that digs through product features, prospectuses and offering memorandums that can all be very different, to create a uniform and consistent body of information so that every product variable can be compared directly

And importantly, the best comparison tools also need to be completely objective, free of ratings, ranking algorithms, advertising or external influence. To best serve the advisor community, comparison platforms need to be the conduit of accuracy and truth – so that as a financial advisor you can make your own, fully-informed decision to help your clients most effectively.

Expand Your Options and Drive Your Growth

In my years working with financial advisors, I’ve seen a common habit: advisors who sell complex products like annuities get to know the details, and primarily offer two or three different options. It makes sense – until recently, it took a great deal of time to understand everything about structured products and annuities, or to keep up with the latest innovations, taking advisors away from doing what they do best: helping their clients.

Now with comparison technology, advisors can vastly and immediately expand their universe of options. They can quickly and easily compare investments across the entire marketplace, with the ability to drill down past the headline features and go deeper into underliers, living benefit, riders, costs and so much more – important information that was often overlooked and hard to easily identify – to determine the right product with the greatest value for each client.

Using comparison software is also an ideal way for advisors to stay on top of the latest in product innovation and benefit from the competitive forces driving issuers and carriers to enhance their products.

To that point, comparison software also helps issuers and carriers: when they have access to the search data from platforms, they can see behavioral trends in searches and comparisons by advisors. With this insight, they can make their own products more competitive – to the benefit of advisors and investors.

Finally, by making investment selections based on a full view and in-depth analysis across all alternative and annuity products, advisors can more easily determine suitability and answer client questions in greater detail, thereby elevating client confidence in their advice. Confident clients are less likely to be swayed by pitches from other advisors promoting different products – pitches you can easily put to rest by having the comparison to show why your choice is best.

Know and Grow: There’s No Comparison to Comparing

The 60/40 portfolio may or may not be dead; but one thing is certain – alternative investments and annuities are playing an increasingly important role in 60/20/20 client portfolios seeking broader asset class allocations. Competitive forces are rapidly driving innovation across the complex investment product market; and with alternative software that lets you compare the marketplace of products by the smallest of detail, you can arrive at the ideal solution for your client in a matter of minutes – driving your productivity and ability to deliver exceptional value. That’s how you stand out from your competition. And standing out by adding value can only add to your bottom line growth.

Power of Partnerships

In collaboration with BBVA Global Markets

At Luma, we understand the power of partnerships, and we are proud to partner with many organizations around the world. Through collaboration with partners like BBVA, a global financial services company and one of the largest financial institutions in the world, Luma can illuminate solutions for financial advisors around the world. With BBVA’s rich history dating back to 1857 and its digital transformation near the turn of the century, we are excited to feature BBVA as our first partner spotlight.

Q&A with Daniel Hernández, Head of E-Connectivity Sales at BBVA Global Markets


As a large, customer-oriented bank, tell us about your mission and how you support your clients? What activities or investments are you making to positively impact change at a local or global level?

BBVA Corporate & Investment Banking (BBVA CIB) brings together the activities of investment banking, markets, financing, and transactional services for institutional investors and corporate clients.

It has a strong global presence, providing services in 24 countries through an extensive team of experts, including investment banking specialists and advisors in specific industries and sectors.

BBVA CIB offers a wide range of value-added products and financial solutions, for the simplest needs and for the most complex ones. Its mission is to help clients to carry out their projects and achieve their business, transformation, and sustainability objectives, whether they are local or international.

How do we aim to make a positive impact? First, besides our global geographical span, we should highlight the BBVA relationship model, which is focused on client needs and seeks to build strong and long-term relationships as well as to leverage the bank’s capabilities in different areas and geographies. Secondly, our mission is to add value for clients and anticipate their needs; BBVA is a recognized partner in sustainability, product innovation, and digital transformation.


What broad product trends have you noticed over the last year, and what do you believe is the driver around these trends? What do you think future trends may be?

If we analyze what investors of structured investments have been looking at recently, we could divide 2021 into two very different halves.

The first half, as we ended 2020 with very positive vaccine news and for the most part of 2021, the main global trend has been riding the recovery economic and equity market wave. 2020 will be a difficult year to forget for many reasons, but it was a really good year for the investment products community globally. We saw how investors benefited from very healthy equity markets and, for a good number of months, structuring desks focused mainly on coming up with underlying themes or industries for their typical Autocall structures, not paying too much attention to product or asset diversification but focusing on maximizing the yield that could be achieved within this bull run. We therefore saw an increase of client appetite around thematic baskets, both at the industry and geographical level, but also a very strong interest in new thematic indices as underlying for structured products, decrement indices and correlation structures.

In the second half of 2021 however, more or less since the middle of the summer, and probably fuelled by global Central Bank news, we have seen how investors have taken the foot off the pedal globally and have started to consider investment diversification. We have observed this diversification not only at the investment product or underlying level – by considering alternatives to Autocalls through more conservative payoffs (i.e. TwinWins, Low Barrier Autocallls linked to less volatile underlyings) – but also diversification at the asset level, as we start to see a growing interest in non-equity structured products from clients all around the world.

The main question indeed remains: “What will investors be looking at in 2021?” We believe that most investors will continue hunting for equity yield as long as equity markets do not have a considerable set back; but, if the recent bearish trend from these last few months continues, we do not rule out a potential flight of client investments to credit linked structures – as medium term economic recovery exist, pandemic worries, and equity markets retreat from their highs – or even to FX structured investments as Central Bank activity starts to generate volatility in emerging and G10 FX pairs.


Many people believe that the pandemic acted as a catalyst for a “digital world.” Has/Is BBVA investing more into digital and technology solutions post-pandemic?

Definitely. Starting with us! In a new and difficult situation, BBVA was able to adapt in record time to the new environment. The first step was to ensure functionality, especially with regards to the ability to transact for our clients, while moving our employees to their homes. I can proudly say that in just one week we had all our Corporate & Investment Banking workforce working remotely, with no interruptions even in our trading floor. This was possible thanks to BBVA’s investment in technology and digital transformation.

At the industry level, the pandemic managed to tumble the barriers that anyone in the investment community had towards the digital world and, if anything, it was the best marketing showpiece to confirm the benefits that digitalizing the end to end for structured investments offers to every step in the value chain.

At BBVA we have invested massively in technology and digital transformation. We have teamed up with Amazon Web Services (AWS) and Bloomberg to install a cloud-based platform for the equity trading team to handle our risk processes, expanding our web-based solution. We are also working with digital platforms like Luma to integrate pricing and post services to clients on both sides of the Atlantic. And we plan to continue investing in technology as we expand our equity, credit, and FX digital offering for our clients in Asia, Europe, and the Americas.


BBVA has a rich history and presence throughout the world. What has continued to make BBVA successful globally and for so many years?

As you say, BBVA is very well-connected to clients all over the world as its operations span across different continents. It is well known that BBVA has a strong leadership position in the Spanish market, but it is also the largest financial institution in Mexico, it operates in Asia, it has leading franchises in South America, it is also the leading shareholder in Turkey’s Garanti BBVA, and has an important investment, transactional, and capital markets banking business in the U.S – hence highlighting that our presence and approach to clients is truly global.

In particular, with regards to our investment products business, we engaged into a major transformation project around two years ago that has allowed us to review the whole end-to-end chain of the investment products manufacturing, revamping our technology and engaging everybody in the BBVA family to take BBVA’s investment products manufacturing offering globally up to the potential we believed that it had. This has been an amazing journey with incredible work by a lot of people in the bank, but also a remarkable opportunity to engage with clients and partners and try to do things the best way possible.

This has led to improvements and innovations such as those mentioned earlier and also has allowed us to set a clear target for the next few years that will ensure us to become even more relevant globally and provide better services and products to clients including new structured product innovative payoffs, post trade digital solutions, or event-driven content and ESG-focused value added, as highlighted by our recent recognition as the World’s Best Bank for Sustainable Finance by Global Finance.


How has working with digital platforms like Luma helped BBVA support financial advisors to create and manage investment solutions?

Working with platforms like Luma allows us to jointly listen and cater for common clients’ needs. We provide financial advisors with BBVA’s manufacturing expertise, ideas, and product innovation, whilst Luma offers service-oriented solutions thanks to its detailed understanding of client requirements. All around, this helps clients to benefit from the most sustainable, efficient, and scalable solutions for structured products in the digital world.

Luma’s ability to provide financial advisors with solutions in all the stages of the investment products service complements the manufacturing expertise that banks like BBVA are able to provide in order to jointly offer clients an all-inclusive package for structured products and end-to-end solutions across different geographies where we both operate.

Empowerment through Education

Education is one of the most empowering forces in the world. By educating financial advisors about various products and industry insights, Luma hopes to build advisors’ knowledge, increase confidence, and break down barriers to greater opportunities.

Luma’s Learning Center application provides advisors with videos and other training resources right on our platform. Training requirements ensure compliance and additional assurance that advisors are recommending the best solutions to specific client portfolio needs.

Some of our newer videos cover topics such as:

  • Autocalls
  • Barrier Reverse Convertible
  • Bonus Certificate without Cap
  • Contingent Interested Rate Memory Note
  • Fixed Interest Rate Notes
  • And more!

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