Rollovers Most Likely to Go to Existing Advisors

The retirement plan rollover market presents considerable opportunity for financial advisors who are willing to invest the time and effort in building long-term relationships with their clients.

Information Sources Used in Rollover Decision

More than 9½ million current and former retirement plan participants were eligible to move $362 billion from company-sponsored retirement plans in the past year, and a significant share of those participants sought the advice of professionals with whom they had long-standing relationships.

Research by Spectrem Group shows plan participants are most likely to turn to professionals whom they know and trust when faced with the decision of whether to continue to participate in an employer’s retirement plan, transfer the account balance to a rollover IRA or the retirement plan of a new employer, convert the balance to a stream of income or withdraw the balance as a taxable, lump-sum distribution.

In fact, individuals say they are more likely to seek information from their financial advisors than they are from their retirement plan providers, family members, friends, employers or other financial firms.

On average, individuals in the rollover market have used their advisors for seven years. Only one-fifth of those who used an advisor to assist with a rollover decision started working with the advisor within the past year.

This is good news for advisors who have nurtured client relationships for years in anticipation of a windfall at retirement.

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