Wednesday, 21 February 2024 13:47

Capitalizing on the 401(k) Rollover Wave: Relationships Are Key

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A financial movement of massive proportions is unfolding: billions of dollars are flowing from 401(k) plans into rollover accounts. Advisors see this as a golden opportunity, and research suggests this trend will persist, offering a potential boost to their businesses.


However, unlocking this opportunity requires understanding participant behavior. Notably, a significant portion of advisor-assisted rollovers involve existing client relationships. This underlines the crucial role of building rapport with individuals early in their careers, well before they face rollover decisions.


While establishing connections is paramount, not all advisors have the resources to cater to every participant. This has led to a collaborative approach, with some advisors partnering with recordkeepers to segment participants. In this scenario, advisors focus on those participants whose account balance size requires more time and effort to service, while recordkeepers assist others.


This partnership approach ensures participants receive the best solution, regardless of account size. It also transforms the advisor-recordkeeper dynamic from adversarial to cooperative, creating a win-win situation for all involved.


By actively fostering relationships and embracing strategic partnerships, advisors can effectively ride the rollover wave and expand their wealth management reach. This requires a proactive approach, recognizing that long-term relationships are invaluable in capturing this lucrative opportunity.

Finsum: The key to capturing 401(k) rollovers lies in building relationships; with plan participants and plan recordkeepers.

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