Monte Carlo Romance Begins on Valentine's.(retirement income planning)

Monte Carlo simulations have long been touted as the key for communicating with investors and advisers about the utility of annuities in retirement income planning. Carriers and broker/dealers have not been able to use them freely because of prohibitions in NASD Rule 2210(d)(1)(D), but broker/dealers will be able to strike up a new relationship with Monte Carlo illustrations this Valentine's Day with the introduction of interpretive material that applies to the existing rule, IM-2210-6.

"The NASD has never allowed a broker/dealer to use forward-looking illustrations when it came to securities," said Mike Henkel, president of Ibbotson Associates of Chicago. The problem was that Monte Carlo simulations were prohibited as hypothetical projections, even if the NASD recognized …