The key to winning a bigger wallet share of retirement assets from affluent investors is as simple as building up expertise at winning client rollovers into IRAs and other retirement fund transfers.
At least that's what the Bank of New York Mellon Corp.'s Pershing LLC custodian business has found. Accordingly, it has launched a website, retirementpowerplay.com, with tips for advisers on how to win 401(k) rollovers and how to build a business advising employer 401(k) plans.
The best place to begin is to evaluate current clients and develop a list of 20 or so high-potential clients. They should be between 45 and 55, have changed jobs or been laid off recently, hold accounts at more than one institution and be close to retirement with the need for an income distribution strategy.
Pershing also suggests that advisers prepare for meetings by brushing up on 2010 tax law changes eliminating income restrictions for Roth individual retirement account conversions and by learning about various IRA offerings and retirement calculators.
Pershing cited its research that $303 billion in IRA rollovers and taxable retirement transfers occur annually and that employees 55 to 64 represent nearly half of that money. The adviser who wins their retirement-planning business typically ends up with the largest wallet share of affluent investors.
“A lot of advisers don't understand the implications of what is going on regarding the growing value of IRA rollovers,” said N. Scott Pritchard, managing director of retirement plan consulting services with Capital Directions LLC, an independent investment adviser that manages $750 million. He said he often works with advisers to help them capture 401(k) rollovers.
Capital Directions has advised registered investment advisers on acting as fiduciary advisers to 401(k) plans, which he called a growing field. As more advisers get into the retirement plan market, they need to be careful to comply with regulations that prohibit advisers from pursuing rollovers from employer plans they are advising, Mr. Pritchard warned.
