Study: Wirehouses Capture More K Plan Rollover $$$

According to a news release about the Brightwork Partners research, 7% of the dollars that rolled from 401(k)s and similar employer-sponsored retirement plans in the past three years were originally on a wirehouse platform. Some 19% of the dollars that rolled ended up in a wirehouse IRA, according to the data.

The losers were mutual fund companies – which gave up six points of penetration (dropping from 58% to 52%) and insurance companies (dropping from 18% to 15%), the announcement said, while banks edged up a bit in the race for rollovers, increasing their share of assets from 16% to 18%.

Mutual fund companies originally managed 61% of the dollars represented by balances of $250,000 or more, but only 53% of the dollars rolled over. Some 5% of the high balance investors said they were with a wirehouse for their 401(k) plan but 22% ended up putting their rollover IRA on a wirehouse platform.  These high balance rollovers represent just 4% of the transactions but 47% of the assets, B rightwork said. Insurance companies continue their retreat in the rollover wars, yielding both people and assets to other types of providers, the research showed

Brightwork estimates that approximately 1.6 million people rolled qualified plan balances of $5,000 or more in 2004, representing assets of approximately $188 billion.

The study is based on a national sample of 3,712 participants or former participants who became eligible to receive a distribution from a qualified plan (including lump sum distributions from defined benefit or cash balance plans) in the past three years. It was conducted online last year.

The study is available from Brightwork at http://brightworkpartners.com .