Current providers have something of an inside track, but they’re not the most popular reason for selecting a rollover IRA destination.
When plan participants are asked why they would consider a specific firm for a rollover IRA, 35% select brand trust, far outweighing all other factors, according to a new report by Market Strategies, based on Cogent’s recently released DC Participant Planscape study. Moreover, that aspect of trust grows more essential as participants age, according to the report.
Among the Silent Generation, 65% of participants cite “is a brand I trust” as a reason for selecting a rollover provider, compared with 30% of Millennials cite trust as a consideration factor. This increase in the importance of trust with age stresses the need for providers to foster relationships over time, according to the report.
“It’s my current plan provider” was cited by 24% overall, the second most-cited criteria. It was also second-most cited by Millennials, and Boomers. Brand reputation (28%) was second-most for Gen Xers, while for Silents, financial stability came in second, albeit at a distant 21%.
A separate study conducted by Market Strategies found that 31% of American households are currently doing business with at least one financial services company they distrust. With trust a top consideration factor among plan participants, this general distrust of the financial services market is both an opportunity and a threat to providers, according to the report.