Top of Mind

The Retirement Plan Raiders are Back!

The anecdotal signs were there: increasing calls from “advisors” requesting instructions on how to roll over plan assets from a qualified retirement plan to an IRA (generally with the participant to whom the IRA was just sold in the room). Often, the participant to whom the advisor is providing “guidance” is older, with the ability to withdraw their 401(k)/403(b) elective deferrals because they are at least 59½ (and these older individuals are often less resistant to the sales pitch). Other trademarks of these “retirement raiders” include targeting participants with large balances ($100,000 or more) and offering IRAs that are almost never low-cost. Yes, the “retirement raiders” are back - and plan sponsors, as well as participants with large balances, should be on the lookout!

If I wasn’t convinced that the “retirement raiders” had resurfaced based on my own anecdotal evidence, this piece clinched it for me. The article states that IRA rollover sales, which had been rather dramatically curtailed by the DOL Fiduciary Rule, are back now that the fiduciary rule is dead. This makes sense if you think about it - if the people who sell IRAs to high-balance retirement plan participants (mostly seniors) don’t have to worry about acting in the best interest of these individuals, it becomes a lot easier to sell high-cost IRA products to them!

Why should retirement plan sponsors care about having their retirement plans raided by IRA salespeople? One important reason is that other retirement plan participants will pay a lot more if the individuals with the largest account balances leave their plans, since average account balances, as well as cash flow, are important drivers in recordkeeper pricing. And thus, an increasing number of plan sponsors have made conscious efforts to retain retirement plan assets.

And why should participants with large balances be wary of all those solicitations offering to move their assets from their 401(k)/403(b)/457(b) retirement plan to a shiny new IRA? Because, in many cases, moving qualified retirement plan assets to an IRA is not the greatest idea.

Be on the lookout for the Retirement Raiders near you!

What do you think of the IRA rollover market? Do you have a dissenting opinion to what I have stated here? I would love to hear from you on LinkedIn, Twitter or at!

Note: This feature is to provide general information only, does not constitute legal advice, and cannot be used or substituted for legal or tax advice. Opinions expressed are those of the author, and do not necessarily represent the opinions of Cammack Retirement Group.

Investment products available through Cammack LaRhette Brokerage, Inc.
Investment advisory services available through Cammack LaRhette Advisors, LLC.
Both located at 100 William Street, Suite 215, Wellesley, MA 02481 | p 781-237-2291