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May 12, 2005 at 08:00 PM
Everyone knows that the Baby Boomer generation represents the wealthiest generation in American history–it controls more than $7 trillion in wealth that will be spent in retirement or transferred to heirs. It’s a no-brainer that a majority of advisors concentrate their marketing efforts on the upcoming wave of Baby Boomer retirees. Moreover, IRA rollovers are particularly attractive for advisors–the assets are sitting in an account, waiting to be transitioned.
But what many advisors may not know about rollovers is that investors transitioning between jobs represent the majority of IRA rollovers. According to Financial Research Corporation (FRC) data, 70% of rollovers are the result of a job change.
AdvisorBenchmarking survey results show that only a very small percentage of advisors’ clients were using advisory services when reinvesting their lump-sum distributions during a job change. For example, more than one third (37.44%) of advisors report that less than 20% of retirement plan rollovers come from job changers. Only 8.5% of advisors say that more than 80% of their clients’ retirement plan rollover assets come from job changers. The amount of assets that are out there, but clearly not coming to RIAs, represents a substantial opportunity for those interested in pursuing this lucrative market.
While the “job changer” segment of the market holds opportunity for advisors, pursuing this market segment requires a degree of specialization. You’ll need to be proficient in helping workers through their transition–especially in the areas of severance, stock options payouts, budget and income planning, and tax and health care coverage issues surrounding job changes.
Once you build your expertise in the many areas–both financial and emotional–of the job-changer market, how do you find job changers? This market segment is difficult to enter and it’s important to develop an appropriate marketing plan to reach these potential clients. According to Kevin Deckert, from Deckert Leahy, Inc. in Richmond, Virginia, advisors should concentrate on three areas when creating their market strategy:
- Developing good relationships with human resources departments at local firms
- Establishing good connections with CPAs
