Cogent’s recent Investor Brandscape report looked at 4,000 affluent and high-net-worth investors (having at least $100,000 in investable assets, excluding real estate and ESRPs) in the U.S. Nearly 31% of all affluent investor assets are now held in some form of IRA account compared to 25% in ESRPs. Furthermore, about a quarter of investors have assets in retirement plans of former employers, signaling that providers still stand to gain from IRA rollover opportunities, Cogent said.
The study found that Fidelity Investments has been ousted as the top fund distributor partly because of the trend of affluent investors moving assets from retirement plans to IRAs (see “Morgan Stanley Smith Barney Ranks as Top Fund Distributor to HNWs”).
Overall, ESRP account ownership has decreased significantly across generations, according to Cogent. While the majority of affluent investors (59%) reported owning an ESRP, that’s down from 70% in 2006. However, the average allocation among owners has remained relatively flat.
Cogent attributes the decline to both the gaining of the generational cohorts and the fact that significantly fewer Boomers are employed full-time outside the home. The economy could also play a role, as it has forced job changes among younger investors.