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Portfolio > Asset Managers

$280B likely headed to rollover IRAs in 2014

By Warren S. Hersch

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Nearly one in 10 (9 percent) investors with at least $100,000 in investable assets is likely to roll over an estimated $280 billion into individual retirement accounts this year, according to a new report.

This finding is included in Investor Rollover Assets in Motion, a Cogent Reports study from Market Strategies International.

One in four (24 percent) investors has at least one retirement plan with a previous employer where a significant portion (25 percent) of his/her investable assets still resides. The report adds that one-quarter of former employer-sponsored retirement plan owner assets also remain dormant.

“Although the well-known challenge of investor inertia around Rollover IRAs holds true, the size of the pool of assets in play says it all — this is a market that providers cannot ignore,” says Linda York, vice president in the syndicated division.

While key life events — changing employers and retiring — remain the top triggers for initiating a rollover transaction, investors who are likely to roll assets report that their top criteria when selecting a Rollover IRA provider are low fees and expenses, followed by an easy process, brand reputation and having an existing relationship with the financial services company.

According to Cogent, Fidelity Investments and Vanguard retain their status as the top desired providers for Rollover IRAs amid variability with investor preference in the latest rankings. Three firms — E*TRADE, Ameriprise and JPMorgan Chase —strengthen their market positions and secure placement in the top 10 for Rollover IRA consideration.

“Opportunities exist in this very competitive market for the providers who acknowledge investor fee sensitivity and make it easy, especially for existing customers, to transfer idle retirement plan assets into a Rollover IRA,” says Julia Johnston-Ketterer, senior director and author of this year’s Investor Rollover Assets in Motion study.

The Cogent study is based on interviews with a sample of 4,170 affluent investors who were recruited from the Research Now opt-in online panel. Respondents were required to have at least $100,000 in investable assets (excluding real estate).

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