The Rollover Landscape
Rollovers represent the single largest organic growth opportunity in the wealth industry now and for decades to come. Demographic trends, investors’ desire to consolidate assets and wealth firms’ growing appetite to pursue rollovers are driving this opportunity, estimated to represent $1T in asset movement in 2025.1
However, digging into this data highlights that wealth advisors are only participating in 22% of this growth opportunity or only 1 in 5 rollovers. While advisor participation is low, relative to the market opportunity, it has increased from 17% in 2024, representing 30% year-over-year growth. The remaining rollovers are either captured by record-keepers or are executed by investors directly. Record-keepers have increased their share of rollover assets by offering more investment options and services, resulting in their share of the $1T rollover pie increasing from $80B in 2022 to $160B in 2025.
The obstacles limiting advisor participation
Given the massive market opportunity, why are advisors not participating more significantly in this $1T opportunity? There are a number of factors across the rollover process that create friction for advisors, firms and clients. Overall process inefficiency is a leading hurdle for advisors to participate in rollovers. Examples of these challenges when taking a manual approach to rollovers include:
- Accessing fee data (statements, Form 5500 data) to complete a before-and-after fee analysis
- Completing the required analysis of service and fit comparisons between the 401K and IRA
- Providing recommendations to and approvals from clients
These challenges can result in a rollover recommendation taking days or weeks to complete, and the transfer of funds can take an additional 6 months to process. Process inefficiencies also impact wealth firms that strive to have consistent processes for recommendations, supervision and the annual retrospective review process.
Another major challenge facing advisors is meeting the regulatory requirements defined by the DOL’s PTE 2020-02. The acronym PTE is descriptive – Prohibited Transaction Exemption – which means that rollovers are prohibited transactions unless you follow a clear exemption process that includes considering cost, service and fit comparisons between the 401K and IRA.
Rollover prospecting is also a challenge facing advisors and firms. When competing with record-keepers, advisors often feel that they have one hand tied behind their back unless they have pre-existing relationships with 401k plan members, their rollover targets.
These hurdles have 2 major effects on advisors and wealth firms. Advisors and firms may choose to ignore this opportunity completely, or they may only pursue larger rollovers to justify the process challenges. One of the leading wealth management platforms with over 2,500 advisors recently shared that their advisors do not pursue rollovers at all, resulting in the firm foregoing a conservative estimate of $12.5B in assets and $125M in fees annually.2 Other wealth firms have taken an “education-only” (vs. recommendation) approach to rollovers, limiting the opportunity for their advisors to fully embrace this growth opportunity.
What is the opportunity for advisors?
Advisors who pursue a convergence strategy by intentionally integrating retirement and wealth management are outperforming peers on key practice metrics – profitability, client retention and long-term sustainability. By offering both retirement advisory services and wealth management, advisors generate average gross margins of 52%, materially higher than practices that focus solely on retirement plans.3 Advisors that actively pursue rollovers will conservatively grow their practice by $5M in assets and $50,000 in fees annually. 4
Data from the recent Hearts and Minds study indicates that around 74 million households have either moved assets recently or say they expect to do so. That’s well above the four-year average. More than 21 million completed moves in the past year, while tens of millions more either have moved before and may move again, or are still contemplating a first shift with rollovers representing the dominant flow for this money in motion.
In addition to the organic asset and fee growth opportunity facing wealth firms, equipping their advisors with technology to compliantly pursue this opportunity is also important from a M&A perspective. One of the largest wealth leaders recently shifted their strategy from “education-only” to recommendations to accommodate the rollover practices of an acquired firm. Advisors who are transitioning their practices between firms (estimated at 10% in 2025) rank technology as a primary driver in choosing their future home.
Driving Advisor Participation in Rollovers
InvestorCOM’s strategy as a partner to leading BDs and RIAs is to maximize their participation in the $1T rollover opportunity. Our partnering strategy is working as advisors are growing their rollover volume by 30% annually, and the average rollover size is almost 3X the industry average. This growth can be attributed to 3 major factors. When advisors have simple, intuitive technology, adoption increases, rollover recommendations are easier, and the focus on this opportunity increases. By dramatically improving advisor efficiency, advisors pursue smaller rollovers, which is important as 83% of all rollovers are under $100,000.1 Finally and importantly, advisors and firms that know they are compliant can pursue this $1T opportunity with confidence.
With our recent announcement of the extended Rollover Platform, advisors and firms are positioned to accelerate rollover growth. Key modules of the platform solution include:
RolloverProspectorTM – combining public and proprietary data with AI-generated prospecting strategies, RP enables advisors to pursue high-opportunity rollover prospects and drive growth.
RolloverAnalyzerTM – the industry leader in generating compliant rollover recommendations, integrated client disclosures and comprehensive supervisory support, the platform is used by 50,000 advisors, processing 300,000 rollover transactions annually.
PeerCompare AnnuitiesTM – a simple and intuitive solution for a complex asset class, enabling advisors to participate in the record-setting annuity volumes flowing into IRAs.
RolloverTransferTM – automating the transfer of funds from 401Ks to IRAs dramatically improves efficiency and eliminates process frustration and transfer delays for advisors, firms and clients.
InvestorCOM’s applications are fully integrated in the platform and also available on a standalone basis.