Webinar—Thursday, October 31st at 1:00 p.m. EDT
To sign up so you can learn about this unique platform, click on the following:
https://advisorsharewm.com/forced-ira-rollovers
Let’s face it, IRA rollovers can be a real pain in the neck. Rollovers can generate significant revenue when the rollover is large, but most EEs do NOT have large rollovers.
This platform will help advisors capture millions of dollars in small IRA rollovers WITHOUT doing ANY work (at NO COST to the employer)!
Voluntary vs. Involuntary (forced) IRA Rollovers
When an employee (EE) who is part of a 401(k)/pension leaves work (because of a new job with a different employer or retires), what happens to their money? It typically sits in an old employer’s pension until it’s rolled out to an IRA.
Employers want the money from a terminated EE out to reduce admin burden, simplify recordkeeping, and limit the employer’s 402(a) fiduciary duty.
So, employers will encourage EEs to roll it out by their choice.
Financial planners and insurance agents are always trolling for terminated EEs so they can also encourage the rollout (so the advisor can pick up AUM or sell FIAs).
Involuntary IRA Rollovers (Force-Outs)
Force-out rollovers are MANDATORY for terminated EEs with small balances (7k or less).
These participants are automatically rolled into an IRA (self-directed) when they do not respond to distribution notices.
This is a great way for employers to de-risk and streamline their plans, help them avoid penalties from non-compliance, and ensure past EEs maintain access to their money in an IRA (not forgotten or left in the employer’s plan).
Amount of Forced Rollovers in the last 12 months
The firm that offers this forced rollover plan has:
-Rollover over $65 million
-Number of Participants Assisted: 26,602
Getting Paid
On small rollovers, the advisor usually has a 100 basis points (annually) built into the platform (25-100 basis points for larger rollovers is typical).
What is the advisor doing besides getting the employer to set up this plan?
NOTHING! The advisor doesn’t do anything on an ongoing basis to help EEs who are forced to roll into newly created/self-directed IRAs.
Pitch this to large employers
This is a platform advisors should be pitching to large employers. The HR person will love it (it solves the headache of getting terminated EEs to voluntarily roll over their money).
Example: Employer with 1,500 EEs with 5% turnover a year (75 EEs).
If 75% of the EEs have $7k forced out, that’s $525,000 in forced rollover AUM each year.
Have this stay in place for 5 years and that’s $2,625,000 (with no growth on the AUM).
Assuming 6% growth from year one, the 5-year AUM total = $3.230 million!
My thoughts?
I love this kind of plan! It shows great value to a business and removes a liability for the business and headaches of the HR person (meaning you will get to talk with the business gatekeeper).
Use a Decision Tree to Decide if You Should Become Series 65 licensed
If you are an insurance agent (non-securities licensed advisor) reading this, you might be saying to yourself, hey, if I had a Series 65 securities license I could use this platform.
To download a decision tree you can use to determine whether to become 65 licensed or not, click on the following (I have one for insurance agents and one for Series 7 licensed advisors):
Download the 65 License Decision Tree
https://advisorsharewm.com/decision-tree-sign-up
How to Gather Assets Under Management with or without a 65 License
WEBINAR—On Recording
To sign up so you can learn more about what we are calling “Advisor Launchpad,” (a platform to help both non-65 and 65-licensed advisors grow revenue), click on the following link:
https://advisorsharewm.com/launchpad-signup/
