One in two (51%) affluent investors with a balance in a former employer-sponsored retirement plan (ESRP) expects to move their money into a rollover IRA in the next 12 months, representing the potential for $382 billion* to transfer into IRAs this year. Providers vying to capture these assets in flux would be well served to target Gen X and Gen Y investors, who are the most amenable to taking action. These and other findings are included in the 2014 annual Investor Rollover Assets in Motion™ study from Cogent Reports™, a division of Market Strategies International.
According to the report, Gen X and Gen Y investors with at least $100,000 in investable assets hold the largest proportion of their assets in former ESRPs and cite the highest likelihood of moving those assets into a Rollover IRA in the near future.
¡°As a result of early-career exploration and job switching, younger investors have accrued a sizeable balance in former retirement plans. The younger the investor, the more receptive and ready they are in terms of taking action,¡± says Sonia Sharigian, senior product manager at Market Strategies International and author of the report. ¡°In fact, 61% of Gen X investors and 74% of Gen Y investors with former ESRPs intend to roll funds into a Rollover IRA within the next year.¡±
In addition, Cogent Reports identified the distributor firms best positioned to capture rollover assets from investors who own a former retirement plan. Vanguard, Charles Schwab and Fidelity Investments are the top preferred Rollover IRA providers with the greatest potential to attract and retain these sidelined assets.
¡°These leading providers have established themselves for offering low fees and expenses and have strong brand reputations, key factors Gen X and Gen Y investors cite when selecting a Rollover IRA destination,¡± adds Sharigian. ¡°Softer, more personal outreach is also influential among these younger investors, who also consider providers they have established relations with¡ªespecially firms that make them feel like a valued customer.¡±
