Desire for Advice Influenced Retirement Money Movement
in Past Year
October 22, 2009 (PLANSPONSOR.com) - A new analysis
shows that contrary to popular opinion, mass affluent
consumers were not passive during the difficult financial
environment of 2008-2009 - they moved significant amounts of
retirement money, including taxable assets, over the past
year, in search of better value, personalized advice and
guidance, and a financially sound provider.
"Retirement Money in Motion: Capitalizing on IRA,
Rollover & Taxable Money Movement" found that the
desire to consolidate accounts was the number one driver of
Retirement Money in Motion decisions - but a minimum,
pre-existing 20% wallet-share capture was required to win
this business. Financial soundness perceptions (and
realities) drove a third of retirement money movement
decisions.
Teresa Epperson, a partner at Mercatus LLC, which
conducted the study in conjunction with Financial Research
Corporation (FRC), noted in a press release that, "While
financial soundness concerns drove over a third of
retirement money movement, the desire for advice, whether
packaged or personalized, was a much more influential
driver." A large percentage of mass affluent consumers in
the study self-identify as "beginners," recognizing the
fact that they need professional financial advice.
The study also found that prior to age 65, the frequency
and size of money movements generally increased with
experience and income.
Topics covered in the study include an overview of mass
affluent consumers' retirement money movement decisions
relative to their retirement assets, as well as their age,
income, and investing experience. The study also explores
consumers' preferences regarding reliance on financial
professionals, their purchase pathway behaviors, and their
perceptions of the financial soundness of institutions.
The study was conducted in May of 2009 and covered the
prior 12-month period. Respondents were from most U.S.
states, ranged in age from 35 to 70, and had an average of
$614,000 in investable assets. In addition, participants
had to have completed at least one of the following
transactions within the past year: rolled assets over from
the employer-sponsored retirement plan to an IRA account,
transferred assets from an IRA account with one firm to an
IRA at another firm, or transferred taxable assets
designated for retirement from one firm to another.
The study report can be found at
www.frcnet.com
.
Rebecca Moore
editors@plansponsor.com