In Practice February 3, 2010

Banks Capturing More IRA Rollovers from HNW Clients

A research report indicates that banks are capturing an increased share of retirement plan rollover assets from affluent investors.
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A news release about the report from BAI Research and Financial Research Corporation (FRC), “2009 Retirement Study: Capitalize on Market Opportunities,” said banks snapped up 33% of the individual retirement account (IRA) rollover market in 2009, up from 23% in 2008, and 18% in 2007.

That compares to investment firms, which captured 57% of the IRA rollover market in 2009, down from 63% the year before, and insurance companies, which grabbed 9% of the rollover assets in 2009, the same as 2008. The data covers more than 2,500 mass affluent individuals between 35 and 70 years old with investable assets of at least $50,000, excluding defined contribution plan assets.

The report also indicated that overall wallet share capture among customers with a retirement relationship (76%) for banks denoted as the customer’s primary bank, is consistently and significantly larger than that of customers without such a relationship (26%).

Orphan 401(k)s remain an obvious opportunity, with $1 trillion up for grabs and 35% of mass affluent consumers holding an orphan 401(k) account in 2009, the announcement said.

“Going forward, banks and other financial institutions that are able to maintain compelling product offerings and services that are aligned with changing market conditions and investor preferences will be better positioned to retain and grow their marketshare,” said Bruce R. Fador, CEO of Financial Research Corporation, in the news release.

The online survey used for the report was conducted among a nationally representative sampling of consumers by Bellomy Research, Inc.

Data & Research February 3, 2010

Asset Management Firm Use of Social Media Still Limited

A new survey of asset management firms finds that 52% don’t use social media, despite a recognition by 84% that social media will have a lasting impact on the financial services sector.
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A news release from New York consulting firm kasina about its survey of 48 asset management firms says 39% of firms are on LinkedIn, while between 20% to 25% are on Facebook, Twitter, or YouTube.

The firm asserts that social media gives customers a chance to engage in a dialogue about a company and its offerings.

“In an industry like asset management, where trust is vital, customers are seeking sounding boards, forums, friends, and experts online to validate, challenge, or question,” says Lee Kowarski, kasina principal, and sponsor of the study. “Asset managers who can progressively take advantage of this movement instead of fight it will have a competitive leg up when it comes to customer loyalty and, ultimately, cash flows.”

The kasina report, which also includes the firm’s own secondary research, contends that asset management firms staying off social media are giving up opportunities to:

  • Connect with customers where they are,
  • Research customer needs and preferences,
  • Deliver improved customer service,
  • Manage their brand, and
  • Enhance their reputation of expertise.


A key stumbling block, however: 73% of respondents feel that compliance concerns inhibit their ability to pursue social media, kasina finds.

More information on purchasing a copy of the kasina report is available here.

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