Study Finds Market Opportunity for High-Balance Rollovers

Research from Spectrem Group found high-balance retirement plan participants aren’t showing much loyalty to their plan providers when rolling over their money.

Just 25% of plan participants who 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 the report “High Balance Rollover 2010.” In addition, less than two-thirds (59%) of high-balance participants used an adviser in the rollover process.  

Spectrem Group estimates 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 assets of $365 billion, according to a press release.  

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The research found 53% of high-balance participants 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.  Of those who did not use an adviser during the rollover process, 22% requested a hard-copy rollover application directly from their providers and 19% handled the process online.  

The Spectrem report, available at http://www.spectrem.com, is based on an online survey conducted in July 2010 of 650 individuals who rolled over or consolidated balances of at least $200,000 from employer-sponsored retirement plans within the prior two years.  

Fidelity Aims to Help RIAs Expand Business

A new Fidelity program, “Expand Your Practice,” is intended to help registered investment advisers (RIAs) analyze their readiness to grow through mergers, acquisitions, or hiring new people.

The new materials are divided into three parts: 

  1. “Your Guide to Expansion White Paper,” which includes a self-assessment checklist, a hypothetical case-study, and several worksheets.  
  2. “Expanding Your Practice – Are you Ready? White Paper,” which includes advice from five M&A experts. 
  3. “Expanding Your Practice” webinars for advisers to interact with a panel of M&A experts and discuss some of the critical issues to consider when preparing to expand a practice. The first one-hour session is scheduled for September 30.  

“As the country emerges from the financial crisis of the past couple of years, many advisers may have more time to spend evaluating strategies that can help them accelerate the growth of their firm,” said David E. Canter, executive vice president at Fidelity Institutional Wealth Services and head of Fidelity’s Practice Management and Consulting organization. “We believe advisers may have a window of opportunity to increase their competitiveness through growth and acquisition. Because M&A activity can be complicated and time consuming, we have developed in-depth resources that can help advisers better understand the opportunities and challenges, while effectively positioning their firm for greater and more sustainable growth.” 

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This new program is in addition to RIA Match, a program designed to match brokers looking to become RIAs with a list of firms that would suit their needs.   

 

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