Investment Professionals May Miss Critical Opportunity to Retain Millions in Assets and Enhance Client Relationships
Looming deadline for clients' year-end minimum withdrawals from IRAs presents advisors with once-a-year chance to help clients and also boost their business
JERSEY CITY, N.J., Oct. 25, 2012 /PRNewswire/ -- Investment professionals are missing a critical business opportunity if they do not help their impacted clients reinvest their Required Minimum Distribution (RMD) assets by December 31, 2012. The Internal Revenue Service can levy a 50-percent penalty on individuals who do not take their RMD from an Individual Retirement Account (IRA) or a non-spousal inherited IRA by the deadline. Investment professionals can not only help their clients avoid this charge but they can also boost their business by assisting these clients in reinvesting their RMD assets.
RMDs represent a tremendous opportunity for investment professionals. Each year, billions of dollars in RMD funds are withdrawn. The Investment Company Institute (ICI) calculates that Americans hold $5.1 trillion in IRAs, yet only one-third of all households taking traditional IRA withdrawals in tax year 2010 reinvested or saved the withdrawal amount in another account with the same financial firm.
Fortunately, advisors have many solutions for reinvesting a client's RMD funds. One of these is an asset management account (AMA), such as Pershing's Corestone Account™. Customers can set up automatic distributions into an AMA and access their funds whenever they are needed. They can use AMAs to handle daily activities, such as checking, investing and bill payments, in one place.
"Retirees are always looking for simple, efficient ways to manage their financial needs. And investment professionals are always seeking turnkey solutions to solve their clients' challenges," said Katie Swain, director of product management and development for Pershing. "An AMA is a great place for RMD assets because it enables clients to hold their cash and investments in one easy-to-access place."
For clients, best-of-breed AMAs bring various advantages, which could include—depending on the AMA—unlimited check writing, a debit card, fee reimbursement on ATM use, dividend reinvestment and loyalty programs.
Pershing LLC (member FINRA/NYSE/SIPC) is a leading global provider of financial business solutions to more than 1,500 institutional and retail financial organizations and independent registered investment RIAs who collectively represent approximately 5.5 million active investors. Located in 23 offices worldwide, Pershing and its affiliates are committed to delivering dependable operational support, robust trading services, flexible technology, an expansive array of investment solutions, practice management support and service excellence. Pershing is a member of every major U.S. securities exchange and its international affiliates are members of the Deutsche Borse, Australian Stock Exchange, Irish Stock Exchange, London Stock Exchange and Toronto Stock Exchange. Pershing LLC is a BNY Mellon company. Additional information is available at www.pershing.com.
BNY Mellon is a global financial services company focused on helping clients manage and service their financial assets, operating in 36 countries and serving more than 100 markets. BNY Mellon is a leading provider of financial services for institutions, corporations and high-net-worth individuals, offering superior investment management and investment services through a worldwide client-focused team. It has $27.9 trillion in assets under custody and administration and $1.4 trillion in assets under management, services $11.6 trillion in outstanding debt and processes global payments averaging $1.4 trillion per day. BNY Mellon is the corporate brand of The Bank of New York Mellon Corporation (NYSE: BK). Additional information is available on www.bnymellon.com or follow us on Twitter @BNYMellon.
SOURCE BNY Mellon
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