Stable Value: More Than a Business

By Randy Myers

Afua Brefo says working in the stable value industry has empowered her as a woman.

Henry Kao says that when he attends Stable Value Investment Association conferences, he doesn’t see service providers or competitors around him but a community of professionals trying to provide a great product for their clients.

Jeffrey Graham says, “there’s something special about stable value, and once you’re in, you’re in for the long haul.”

Members of the stable value industry, it turns out, often see their work as more than a job or even a career. They see it as an opportunity to help American workers achieve a financially secure retirement, and they see their colleagues across the industry as partners in that effort.

“That’s not to say you don’t have very dynamic discussions and disagreements, but they are always respectful and you know that at the end of the day we’re all trying to create a good experience for our clients,” said Kao, head of the stable value business at investment management company PIMCO, during a roundtable discussion at the 2023 SVIA Spring Seminar in Orlando, Fl.

In addition to Kao, participants in the discussion, led by Lacey Lockward, vice president and head of stable value for Prudential Financial, also included Brefo, a vice president with Transamerica Stable Value Solutions; Graham, director, stable value solutions, MassMutual; and Christina Burton, a director at Galliard Capital Management and a member of its stable value contract strategy team. Together, the five panelists spoke about how they found their way into the stable value industry, what’s kept them there, and how they’ve seen the industry evolve over the course of their careers.

For Kao, working in stable value became more than a job after he’d spent a few years in the business. Early in his career, he was simply focused on landing as many deals as he could. But when he started to understand the industry more deeply, he pivoted away from being transactional and started to think more holistically about the business, ultimately concluding that everyone involved in it was, in some way, a steward of the industry.

“Once you start understanding this business, a light bulb turns on,” Kao said. “It becomes a more fulfilling career once you start thinking about the choices you make in terms of whether they are good for the industry and ultimately good for your clients.”

Lockward had a similar experience, saying that when she got into the business about 20 years ago and started going to Group Annuity Pension Compliance Association conferences, she quickly realized she had much to learn about stable value.

“It wasn’t until I really started understanding the product and all the benefits of it that I started to dig in and feel like this is a great industry,” Lockward said.

Now, after watching the industry work through various crises in the financial markets—and emerge stronger for it—she sees it as a “very solid industry,” too.

Graham said responding to those crises and meeting the challenges they presented had been energizing for him, as was helping MassMutual build its stable value business from scratch starting in 2010.

“But looking back, what I’m probably most proud of and thankful for is all the friends and relationships you build (in this industry) over time,” he says now.

By way of illustrating how tightly knit the stable value industry is, several of the panelists noted that they received much appreciated support from their colleagues even when they moved from one firm to another.

“Stable value really supports career growth for me,” said Brefo, noting that when she transferred from Vanguard to Prudential, and then from Prudential to Transamerica, her colleagues were supportive and helpful.

Lockward had a similar experience.

“When I transitioned from New York Life to Prudential the people at New York Life were very supportive,” she said. “I feel like people get this (support) throughout our industry.”

Burton, who joined Galliard in 2009 after spending a few years with Wells Fargo Bank out of college, said she sees herself working in an industry where it feels like everybody is on the same team.

“Even though you’re working with other companies, and you have competitors, we’re all trying to do the same kind of thing for our clients,” Burton said. “We all try to problem solve in a way that’s beneficial for everybody. Nobody’s really trying to edge anybody out, and we’re all trying to do our best to make the product better.”

The panelists contended that the stable value industry is stronger today than it was 20 years ago, thanks in part to changes made following the 2008 credit crisis. Those changes included a renewed focus on creating strong investment guidelines for asset managers and the debut of several new players in the stable value wrap contract business. Clients also have become better educated about the product, the panelists said, and plan sponsors, stable value managers and wrap providers communicate more often and more transparently.

“There was a lot of stress at the time,” said Burton, referencing the 2008 credit crisis, “but from that investment guidelines tightened and risk controls got better, and those difficult conversations helped everybody grow together.”

While pleased with how far the industry has come, the panelists also made clear they are eager to see it continue to grow. One suggested avenue of growth was to make stable value an integral part of products that are being developed to help retirement plan participants convert their savings into retirement income.

“Have we reached our limit?” Lockward asked. “I hope the answer is no—that we can continue to innovate and bring stable value and all of its benefits to new markets.”