In the year i've been actively engaged in offering the Allstate Structured Sale product a few striking things have jumped out at me.
The first is that while installment sales of real property are long established and understood by most tax professionals, the concept of a secured installment sale using the NABCO assignment and Allstate annuity to secure it just blows a lot of tax professionals minds. Maybe I look at things a little more simply then others, but when you dissect the process by which this is done, which is the seller includes in the the purchase and sale an installment schedule, then directs the buyer to wire the deferred portion to the assignment company, and then execute the non-qualified assignment with NABCO, it really couldn't be any more simple.
I think the simplicity when compared to competing concepts such as private annuity trusts and 1031 exchanges is really what throws them. The accounting is simple, it's not a "big documentation" type of transaction, and the guarantees and performance are straight forward. It's almost as if people say something so simple and safe can't possibly work, because all they have seen is complexity and risk from competing strategies.
The second element that jumps out at me is how woefully inept the vast majority of structured settlement brokers are in selling this. As some of you may or may not know, the structured settlement industry is historically focused on one product, the settlement annuity, and one client, the casualty company that purchases those types of contracts to fund it's obligations in personal injury cases involving periodic payment settlements. The skill set required for that market, singular focus on one product, exclusion of other advisors, developing exclusive markets that freeze out competition don't translate well to the structured sale market.
To succeed in selling structured sales takes a team approach of tax professional, real estate professional and typically a financial advisor to the seller of the property. It also takes more then a rudimentary knowledge of financial planning and other tax issues to be able to converse and hold your own with the other experts, and many structured settlement professionals aren't comfortable in that sphere. The net result is many cases opened and quoted, with a relative handful closed and funded. Basically a lot of smoke but no fire.
The successful expert in this area will have to engage in a method of business which is outside the norm for structured settlements, with long time periods geared toward developing relationships based on professional expertise as opposed to locked in or protected access to markets.