High-balance retirement plan participants aren't showing much loyalty to plan providers when rolling assets into an individual retirement account, and this could be a major opportunity for advisers.
Just 25% of plan participants who have performed a rollover of $200,000 or more since mid-2008 rolled all or some of the funds into an account held by their existing plan provider, according to a survey by Spectrem Group.
According to the survey, 53% rolled over at least part of their balance to firms where they held other investments and 39% transferred funds to firms where they had an existing IRA.
Spectrem estimated the high-balance IRA rollover market, which includes both high-balance rollovers and the consolidation of IRA accounts totaling $200,000 or more, consists of more than 935,000 individuals with $365 billion of assets.
"With just one in four high-balance retirement plan participants selecting their existing plan providers at rollover time, it's clear that plan providers have an opportunity to make significant gains," Spectrem President George H. Walper said in a press release. "Further, less than two-thirds of these participants used an adviser in the process, suggesting that both providers and advisers should work to improve communications with this important group."
