Spectrem Study Finds Market Opportunity for High-Balance Rollovers

September 16, 2010 (PLANSPONSOR.com) – Research from Spectrem Group finds high-balance retirement plan participants aren’t showing much loyalty to their plan providers when rolling over their money.

Just 25% of plan participants who performed a rollover of $200,000 or more since mid-2008 rolled all or some of the funds into an account held by their existing plan provider, according to the report “High Balance Rollover 2010.” In addition, less than two-thirds (59%) of high-balance participants used an adviser in the rollover process.  

Spectrem Group estimates the high-balance IRA rollover market, which includes both high-balance rollovers and the consolidation of IRA accounts totaling $200,000 or more, consists of more than 935,000 individuals with assets of $365 billion, according to a press release.  

The research found 53% of high-balance participants rolled over at least part of their balance to firms where they held other investments, and 39% transferred funds to firms where they had an existing IRA.  Of those who did not use an adviser during the rollover process, 22% requested a hard-copy rollover application directly from their providers and 19% handled the process online.  

The Spectrem report, available at http://www.spectrem.com, is based on an online survey conducted in July 2010 of 650 individuals who rolled over or consolidated balances of at least $200,000 from employer-sponsored retirement plans within the prior two years.