Cogent Research studied 4,000 affluent investors and found that while the overall ownership of retirement accounts has declined since 2006, the use of workplace-based retirement accounts — including 401(k) and 403(b) plans — have diminished at a more rapid pace. The overall use of workplace-based retirement accounts has decreased by 23% since 2006, according to the firm. IRA participation rates, however, slid by only 5%.
Cogent's analysis found that "the majority of dollars investors once allocated to employee plans have been funneled into IRA accounts and, to a lesser extent, bank accounts." Affluent Americans now hold 31% of their assets in IRAs and 25% in workplace plans.
The trend could lead to a renewed arms race among financial firms seeking to tap demand for IRAs. Last year, 19 investment firms boosted the portion of assets investors held in IRAs by 15%, Cogent's study said. Seven firms increased the average portion of primary client assets in IRAs by 20% or more: Fidelity Investments, ING
Cogent expects ongoing "rollover momentum" to boost IRA asset gains this year. While fewer investors have assets sitting in retirement plans sponsored by former employers (24% in 2009 versus 31% in 2008), those who do may be more likely to roll over those assets into an IRA (45% in 2009 compared to 39% in 2008).