SOURCE: Spectrem Group

September 16, 2010 08:00 ET

High-Balance Retirement Plan Participants Looking Elsewhere for Rollover IRAs

Just 25% Stick With Existing Plan Providers; Presents Opportunity for Providers and Advisors in $365 Billion High-Balance Rollover Market

CHICAGO, IL--(Marketwire - September 16, 2010) -  High-balance retirement plan participants aren't showing much loyalty to their plan providers at rollover time.

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 "High Balance Rollover 2010," a new report released today by Spectrem Group (

Instead, 53% 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.

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.

"With just one in four high-balance retirement plan participants selecting their existing plan providers at rollover time, it's clear that plan providers have an opportunity to make significant gains in the $365 billion high-balance IRA rollover market. Further, less than two-thirds of these participants used an advisor in the process, suggesting that both providers and advisors should work to improve communications with this important group," said George H. Walper, Jr., President of Spectrem Group.

Indeed, less than two-thirds (59%) of high-balance participants used an advisor in the rollover process, with the remainder either requesting a hard-copy rollover application directly from their providers (22%) or handling the process online (19%).

The Spectrem report, "High Balance Rollover 2010," 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. A subset of 503 performed a rollover. The data have a margin of error of plus or minus 4.3 percentage points.

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