Business Week reports on a new study by consulting firm
that large Wall Street firms are likely to capture a sizeable share of the $300 billion expected to roll out of 401(k) plans this year. Much of this money will come from the Baby Boomers, the first of whom reached age 60 last year. And this will be just be the start as they begin to retire over the next 10 to 20 years.
Cerulli predicts that it’s the ability of these brokerge firms to provide advice through their large network of financial advisors combined with their brand recognition, products, and marketing expertise that will cause many Boomers to move their retirement funds from their employers to IRAs with these firms.
But on the other hand, an independent survey commissioned by Retirement Corporation of America in May, 2006 indicated that more Americans rely on themselves and their friends for making critical investment decisions than financial advisors. According to the survey, the majority of investors:
- Believe "you’ve got to have money to make money" because top quality advice is reserved for the wealthy,
- Prefer to trust themselves, friends or family for good advice ahead of the experts, and
- Have a low opinion of commission-driven financial advisors
That’s the perception – not softened by stories in the mass media with headlines such as Unscrupulous brokers prey on 401(k) holders.
The industry has some PR work to do.