According to new research from Cerulli Associates, a Boston-based global analytics firm, retirement rollover contributions reached $321 billion as of year-end 2012.
“Financial services providers are focused on IRA rollovers to win and retain clients, and to increase assets under management or advisement,” said Kevin Chisholm, associate director at Cerulli. “Rollovers are not just an opportunity for IRA providers. They are a necessity to be successful.”
In its latest report, “Evolution of the Retirement Investor 2013: Influencing and Addressing Retirement Savings”, Cerulli examined decisions made by individuals throughout their retirement planning lifecycle, with particular emphasis on 401(k) plan participants, IRAs, rollovers and retirement income. The report profiles these individuals and allows firms to develop strategies aimed at capturing assets earmarked for retirement.
“Rollovers to IRAs will continue to increase as distributions from 401(k) plans increase. There is an intense competition for these assets, and those with existing relationships have a distinct advantage,” Chisholm explained. “But, many individuals have multiple relationships, so multiple firms have an opportunity to demonstrate their capabilities to potential clients.
“Rollovers continue to have a much greater impact on IRA asset growth than contributions.”
Cerulli's research finds that rollovers present an opportunity for both IRA providers and defined contribution plan recordkeepers. Traditionally, most assets are rolled into IRAs, but Cerulli encouraged DC recordkeepers to focus on keeping assets within the 401(k) market by touting the benefits of employer-sponsored plans and also by engaging individuals who are changing jobs.
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