The 401(K) plans that get left behind when investors change jobs present a huge opportunity for advisors looking to add assets under management.
Ten percent of investors who had left plans behind moved assets totaling $750 billion last year.
Large banks and institutions have little interest in capturing retirement assets while contributors are younger.
This leaves the field wide open for independent RIAs like you.
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In a recently conducted survey, 27% of investors admitted that they still had assets in what are called orphaned 401(K)s.
It’s another reason for advisors to focus on retirement planning. Over 2000 investors responded to the survey by the Financial Services Practice at AlixPartners, a management consultancy.
Affluent investors move dormant 401(K)s because they want to simplify their wealth management and get better organized.
The best sources for these transactions are clients that are already in your book. Having a relationship with the client from the time they began contributing to their initial IRAs is key to capturing the orphan 401(K) rollover business.
The $750 billion already moved was either in the form of a rollover of a 401(K) into an IRA, from an IRA in one institution to another, or taxable transfers consolidating assets at a single institution.
Attention to these assets will show your clients your expertise
in retirement matters, possibly opening a new focus for your business.