Affluent Americans Not Taking Advantage of Rollover Opportunity

Nearly half (44%) of affluent Americans, and 53% of those with more than $5 million in investable assets, have assets remaining in a former employer's retirement plan.

New research by Cogent Research, a Cambridge, Massachusetts-based firm, found that the average amount of assets invested in plans of former employers is $259,521, or on average 28% of an affluent American’s investment portfolio. Seventeen percent of those with assets in a former employer plan have more than half of their total investable assets, exclusive of real estate, in such plans.

Sixty-two percent of affluent investors with assets in a former employer’s plan have not moved these assets despite at least one current active adviser relationship, the study found. Among the remaining 38% who say they do not currently use an adviser, younger investors, particularly those ages 43-51 are more likely than their older counterparts to leave assets in the plans of former employers.

A roughly equal proportion (13%) of those with investable assets of $100,000 to $250,000, have 76% to 100%, virtually their entire investment portfolio, in the plan of a former employer, according to Cogent Research.

More than half of respondents (57%) who said that a portion of their investable assets are still in a plan sponsored by a former employer continue to be employed full-time outside of the home. Only 14% are fully retired and 9% are semi-retired.

Cogent Research’s study of 4,000 affluent and high net worth Americans will be available later this month, the company said. The study includes a survey conducted online of a representative cross section of 4,000 adults with at least $100,000 in investable assets with significant participation of high net worth investors with more than $2 million in investable assets. Cogent conducted the survey between October 6 and November 1, 2006.