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—especially firms that make them feel like a valued customer.”
