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IRA Rollovers on the Rise: Advised Versus DIY Investors

Author

Matthew Drinkwater, Ph.D., FSRI, FLMI, AFSI, PCS
Corporate Vice President, Annuity and Retirement Income Research
LIMRA and LOMA
mdrinkwater@limra.com

August 2025

Individual Retirement Accounts (IRAs) represent the single largest portion of the retirement savings marketplace. As of year-end 2024, traditional, Roth, and SEP/SIMPLE IRA assets totaled $17 trillion, according to the Investment Company Institute (ICI). About 56 million U.S. households own at least one IRA account, representing 42 percent of all households.

Rollover Market Trends

Based on information from the IRS, rollovers (excluding most IRA-to-IRA transfers) from workplace retirement plans, including 401(k) plans, 403(b) plans, and some cashable defined benefit pension plans, represent by far the biggest source of inflows into IRAs. LIMRA estimates that IRA rollovers to retail IRAs (traditional and Roth) reached $747 billion in 2023 and increased to $807 billion in 2024, reflecting the strong stock market returns during these two years. LIMRA projects that retail IRA rollovers will exceed $1.1 trillion in 2030.

Deciding to roll a balance from a DC plan to an IRA is a complex decision. For some investors, it may represent the largest single financial transaction they have ever done. Accordingly, investors usually talk with one or more people before making their decisions. In a recent study, LIMRA asked investors who had recently conducted an IRA rollover why they made their decisions and whom they consulted for assistance. Three in four investors who regularly work with a financial professional (FP) to help make financial and investment decisions (“advised investors”) discussed the rollover decision with their FPs.

Investor Decision Drivers

One major part of this decision involves selecting the destination company for the rollover: Who wins the business? In this competitive market, the choice of rollover destination is made based on a wide range of factors, including consolidation, convenience, investment choices, and service. Overall, consolidation tended to be a top reason for selection, along with the destination company offering desired investment options and good ways to generate income in retirement.

When asked to indicate the most important reason for choosing a destination company, advised investors express different motivations than non-advised investors regarding several of these decision factors (Figure 1).

Advisor Influence

Investors working with FPs are relatively likely to choose a destination company because an FP recommended it or because their FP worked at the company. In addition, compared with non-advised investors, planning and advice services were key decision factors, along with having retirement income or investment options. Relative to advised investors, non-advised investors tended to place greater emphasis on consolidation-related factors, such as already having an IRA with the selected company. The company’s reputation and its ability to help with every step of the rollover process were especially valued by non-advised investors.

Figure 1. Most Important Reason for Choosing a Destination Company


Filter the data in this chart by clicking on a color bar in the chart legend.
Based on 607 investors who rolled into an IRA.
Source: Capturing the IRA Rollover Opportunity, LIMRA, TBD 2025.


Marketing Implications

These motivational differences between advised and non-advised investors have important implications for marketing strategies. The affiliation of an investor’s FP, along with consolidation factors in general, can be determinative for investors’ rollover destination decisions, with nearly 3 in 10 advised investors citing consolidation-related reasons. However, advised investors — by definition — value professional advice and guidance, and the ability of a company to offer these services and tools could override the importance of the FP’s affiliation.

Also, these investors tend to be wealthier than non-advised investors, and thus, may be less focused on accumulation and more focused on the goals of investment preservation and portfolio sustainability while generating retirement income. If their FPs are lacking in this area, they will seek such services elsewhere, which could ultimately erode the advisor-client relationship and strengthen the institution-client relationship.

The selection of the investment into which the balance is rolled also varies with FP usage. Advised investors are twice as likely as non-advised investors to roll most or all of the money in the plan to an annuity — consistent with their prioritization of certain investment and retirement income options.

In contrast, non-advised investors seem to take the path of least resistance, by either consolidating assets with an existing institution, relying on company reputation rather than specific products or services offered, or going with companies that make the rollover transaction process easy. Even though these investors do not currently work with FPs and are not selecting companies based on their advice services, those not yet retired will likely need guidance as they enter that life stage, so personalized outreach to rollover customers should be ramped up as they approach their retirement years.

Conclusion

As the IRA rollover market continues to grow, understanding the nuanced motivations of advised and non-advised investors is critical for financial institutions seeking to capture and retain these assets. Firms that align their offerings with investor priorities — whether through personalized advice, seamless consolidation, or robust retirement income solutions — will be best positioned to thrive in this competitive landscape.

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