Products January 22, 2010

Putnam Launches Roth IRA Resource Center

Putnam Investments has launched a new Roth IRA Conversion Resource Center for financial advisers.
Reported by

According to an announcement, the Resource Center includes information about traditional IRA conversions, how to evaluate whether they make sense, what investors should consider before converting, and how Putnam can help an adviser have the Roth IRA conversion conversation with their clients. The solution is designed to help financial advisers respond to clients asking for advice on conversions since the tax law change eliminating income caps that restricted higher-income investors from converting traditional IRA assets to Roth IRAs took place on January 1.

The Roth IRA Conversion Resource Center features the Putnam Roth IRA Conversion Evaluator, an interactive tool designed to facilitate a conversation between advisers and their clients and which provides results displayed upon a spectrum of how strongly or not clients should consider a Roth IRA conversion, depending upon their current tax situation, age, legacy wishes, and other factors, the announcement said.

The offering also provides advisers with support materials, including comprehensive Roth IRA conversion background, considerations for clients thinking about a conversion, information on conversion wealth management and tax strategies, to-do checklists, and letters than can be adapted to explain the new changes to clients.

Data & Research January 22, 2010

Affluent Investors Have More Money in IRAs than Employer Plans

For the first time ever, affluent investors now report having more dollars allocated to individual retirement accounts (IRAs) than to employer-sponsored retirement plans (ESRPs), according to Cogent Research.
Reported by

Cogent’s recent Investor Brandscape report looked at 4,000 affluent and high-net-worth investors (having at least $100,000 in investable assets, excluding real estate and ESRPs) in the U.S. Nearly 31% of all affluent investor assets are now held in some form of IRA account compared to 25% in ESRPs. Furthermore, about a quarter of investors have assets in retirement plans of former employers, signaling that providers still stand to gain from IRA rollover opportunities, Cogent said.

The study found that Fidelity Investments has been ousted as the top fund distributor partly because of the trend of affluent investors moving assets from retirement plans to IRAs (see “Morgan Stanley Smith Barney Ranks as Top Fund Distributor to HNWs”).

Overall, ESRP account ownership has decreased significantly across generations, according to Cogent. While the majority of affluent investors (59%) reported owning an ESRP, that’s down from 70% in 2006. However, the average allocation among owners has remained relatively flat.

Cogent attributes the decline to both the gaining of the generational cohorts and the fact that significantly fewer Boomers are employed full-time outside the home. The economy could also play a role, as it has forced job changes among younger investors.

«