Targeting Rollover Accounts Is Now A $347 Billion Opportunity

Wednesday, April 20, 2011 06:31
Targeting Rollover Accounts Is Now A $347 Billion Opportunity

Tags: 401(k)

Some advisors like working with 401(k) rollovers. Some don't -- or maybe they've just never thought about it.

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About 1/3 of all the advisors out there are using targeted efforts to capture rollover accounts and bring in an extra $5 million a year in AUM, research firm Cogent says.


These advisors get a lot more big accounts, bringing in $355,000 per rollover client on average.


And since these advisors currently have about $128 million in AUM apiece, just grabbing one or two of these accounts can start moving the needle on their practice fairly quickly.


But with an estimated $347 billion in play every year, how can advisors go after these assets?


Cogent suggests making 401(k) rollover a bullet point in the client prospecting process. It provides an added bit of value for you to talk about, and reminds would-be clients who might have stranded retirement assets that this could be time to roll over.



Comments (2)

I've read many reports of this nature and I actively pursue this market. In practice, however, I do not find a demand for this help. I constantly talk about rollovers with clients, friends, in brochures, emails, and I have used lead lists and cold-calling.

The sollicitations fall on deaf ears. There is no wave, not even a trickle of interest. I can't cite one instance of a person responding positively (Yeah, I was thinking of rolling over my 401K) to a discussion of rollovers and consolidating various 401k accounts.

I see many articles claiming a desire for help, but the day-to-day, in the trenches experience does not corraborate this.
gstringfield , May 19, 2011
Hey there --

I hear you. The conversation-to-capture ratio on this business is pretty low, same as with the Roth conversions in the last few years. What the business development gurus always tell me (and who knows if they're right) is that keeping topics like this alive in your materials achieves a couple of goals:

1. Clients hear about it from you, so you cement your role as gatekeeper of all things financial. Even if they don't act on the opportunity, at least you're better assured they're not going somewhere else.

2. Prospects probably aren't in a position to act on the opportunity right now, but "dripping" on them reinforces their association of you with this planning area. so when they do need help here they dig up that old brochure and give you a call.

3. Having something new to talk about is an excuse to reach out and capture new taxable assets. A bunch of estate planners told me they used the Roth conversion conversation for this -- their clients couldn't care less about the Roth, but once they were on the phone, the planners could dig around and see if there was another service they could provide.

Also, the rollover's pretty time-sensitive, so if you don't catch the rollover-er (?) on the right day, you miss the shot. I wonder if trying to capture freestanding IRA accounts might be a more productive way to go after what amounts to the same assets.

Tell you what, I'll dig around and see if we can get a strategy that actually works.
ScottMartin , May 19, 2011

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