“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 .