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The trend
A growing number of retirees are leaving their savings in defined contribution plans — mainly 401(k)s — after they have stopped working instead of rolling them over into an outside account.
The trend is meaningful for advisors who are fiduciaries and have a potential new pool of client assets to guide. For advisors who charge fees based on assets under management, it raises questions on compensation and conflict of interest, retirement researchers say.
Indeed, 42% of participants had remained in their DC plans three years after retiring, which is more than double the number from 10 years ago, according to J.P. Morgan Asset Management's 2018-2019 Retirement by Numbers research report.
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Ginger Szala
Ginger Szala is executive managing editor of Investment Advisor magazine. She covered the financial business and alternatives industry for 30 years while editor of Futures Magazine Group. MSJ Northwestern, BA University of Wisconsin-Madison. She is based in Chicago. Go Blackhawks!
