IRA Rollover Opportunities for Financial Advisors

While the 401(k) plan may play a lead role in retirement savings collection, IRAs top the market for job seekers and retirees by providing more options for investment, consolidation, and retirement income.

Benefits of Rolling Over to an IRA

Many investors choose an IRA Rollover because they end ties with a former employer, but IRAs, especially self-directed IRAs, offer substantial additional benefits. Rolling over an IRA can make it easier to manage a comprehensive look at the overall portfolio by consolidating multiple retirement accounts. IRA Rollovers can also reduce administrative fees, paperwork and passwords—for both investors and their advisors. Investors can also create tax diversification by combining Roth and Traditional IRAs to create streams of both taxable and tax-free income in retirement, while also creating tax-free assets for heirs. IRA Rollovers also can offer more distribution flexibility and allow investors to aggregate their required minimum distributions (RMDs) to achieve their retirement income strategies.

Unlike cashing out, there are no tax consequences when rolling over retirement assets to a Traditional IRA, and a direct rollover avoids the mandatory 20% withholding on retirement plan distributions. Investors can also continue the tax-deferred growth on investment earnings in a Traditional IRA and tax-free growth in a Roth IRA. Investors can add additional contributions, and individuals may contribute up to $6,000 for 2019 ($7,000 if age 50 or older). Another benefit is that investors have the freedom to choose the IRA custodian that offers the types of investments and services that best suit their retirement savings and retirement income needs. By rolling over assets into a self-directed IRA, investors can access a wide variety of alternative investments including private stock, real estate, and precious metals to fit their specific retirement income and investment goals.



Why Rollover to an IRA?

Around 70% of workers expect their retirement income to come from an IRA, and there tends to be multiple reasons why they choose to roll over their retirement assets to an IRA.2

Rollover Strategies by Age

Baby boomers are now in their mid-50s to early-70s, which means they’ll be looking for many of the benefits of IRA rollovers as they focus on planning and saving for the near future. They will likely be searching for IRA rollover solutions and service providers that support retirement income planning while still providing flexible distribution options.

Millennials and Gen-Xers are also active participants in the IRA rollover market. Since they tend to change jobs frequently, they may be seeking assistance about consolidating their savings from multiple former employer plans. It is likely that they will need guidance when assessing investment models and fees in IRAs since many will be unfamiliar with retirement options outside of a 401(k).

Be Aware of the Regulatory Arena

Many agencies want to ensure that investors are receiving unbiased rollover guidance and have included rollover practices in their regulatory and examination initiatives.

•  The SEC proposed guidance that would create a new “Regulation Best Interest” standard for broker-dealers when providing individualized advice to retail investors, which includes IRA owners.4

•  The DOL is reconsidering its conflict of interest rules and prohibited transaction exemptions related to providing investment advice, which previously included compensation practices relating to IRAs and IRA rollovers.5

•  FINRA issued guidance that reminds broker-dealers and advisors of the potential for conflicts of interest when recommending that an investor roll over plan assets into an IRA from which the broker or advisor will earn commissions or fees.6

Provide Support to IRA Rollover Prospects

Not only will investors need assistance in making educated decisions about what to do with their retirement savings and investments when they change jobs or retire, but they may also need guidance when it comes to the factors they should take into consideration when planning their retirement income. Advisors and financial services firms should have a strategy in place to provide this support as investors navigate IRA rollovers and the overall retirement savings market.



1. Investment Company Institute (ICI), “The U.S. Retirement Market, Fourth Quarter 2018,” March 2019,
2. Investment Company Institute, ICI Research Perspective, Vol. 24, No. 10, “The Role of IRAs in US Households’ Saving for Retirement, 2018,” December 2018, per24-10.pdf
3. Investment Company Institute, ICI Research Perspective, Vol. 24, No. 10, “The Role of IRAs in US Households’ Saving for Retirement, 2018,” December 2018, per24-10.pdf
4. SEC, Proposed Rule, “Regulation Best Interest,” April 18, 2018,
5. DOL, Field Assistance Bulletin No. 2018-02, May 7, 2018,,, DOL/EBSA Unified Agenda, Fall 2018, Fiduciary Rules and Prohibited Transaction Exemptions, eAgendaViewRule?pubId=201810&RIN=1210-AB82
6. FINRA, Notice 13-45, Rollovers to Individual Retirement Accounts, December 2013,

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