Online brokerages likely to nudge out full-service firms for rollover assets

Four-in-10 high-net worth investors with money currently sitting in an employer retirement plan are ready to roll over those assets to an IRA within the next 12 months. An average account balance of nearly $200,000 means around $450 billion of retirement assets are going to be in motion.

But market insight firm Cogent Research reports it’s not the full-service advisory practices that are going to be the beneficiaries of these rollover assets. Four of the top five rollover IRA destinations are firms that are traditionally known as online or discount brokers, many of which also have substantial 401(k) plan franchises.

“Online brokers have spent a lot of time and money encouraging investors to use their rollover services, and it’s working. Not only are they the most likely to be successful at migrating client assets from the institutional-side to the retail-side of the house, online brokerages are also the most likely to bring in new dollars at the expense of full-service providers,” said Christy White, principal of Cogent Research in a statement.

“Assets In Motion: The Rollover IRA & Retirement Income Market Opportunity,” Cogent Research’s latest report, has identified that one in three (32 percent) affluent and HNW investors have assets currently sitting in former employer retirement plans like 401(k), 403(b), and 457 plans.