In an effort to capitalize on what some have dubbed “the Year of the Roth,” Huntington Bancshares’ wealth management arm is planning a direct-mailing campaign for a targeted group of customers.
The Columbus, Ohio, banking company plans to target about 4,000 customers of its Huntington Investment Co. that have Individual Retirement Account assets. Belinda Sherman, a senior vice president and national sales manager at Huntington Investment Co., said after the direct mailing, the unit’s 150 financial advisors will follow up with clients individually to discuss the benefits of converting.
Analysts said 2010 has been dubbed “The Year of the Roth” by some wealth management providers because this year, anyone with an eligible rollover distribution from a company retirement plan or an Individual Retirement Account can convert that distribution to a Roth IRA, regardless of income or tax filing status.
The $100,000 income ceiling for Roth IRA conversions has been permanently repealed, so high-income clients can now convert their IRAs. Married individuals filing separately can also can now convert.
Robert Comfort, the president of Huntington Investment, said advisors will be able to use this as an opportunity to talk to clients about Roth conversions, but perhaps more importantly, an opportunity to talk about their overall financial picture.
“We view this as a chance to talk comprehensively to our customers about their retirement planning strategy,” he said. “This is an opportunity to approach them with urgency. We believe this is a healthy opportunity to get an appointment with our customers and then get in depth about their overall plan. Markets have changed. The industry has spent so much time thinking about asset growth that now we have to change the conversation to talk about income planning and how clients can make these savings last through retirement.”
Comfort said that this conversion represents an enormous opportunity for Huntington Bancshares. After the initial direct mailing to the targeted group of Huntington Investment’s customers, he said that it plans to target customers of the bank that are between 40 and 60 years old and have between $100,000 and $500,000 of investable assets.
Previously, Huntington has conducted broader direct market campaigns, Comfort said.
“Most banks don’t take this targeted approach, in the past we haven’t been this targeted,” he said. “We are using a lot of client data and technology to try to look at our clients in a more targeted way based on the life stages that they are in. We want to deliver the best products based on their age and potential investable assets.”
Despite the plethora of wealth management companies that are discussing IRA conversions and pushing Roth calculators, investors remain relatively wary about converting. A survey by TD Ameritrade of 1,000 retail investors that was released in December found that 44% of those with a retirement savings account that could be converted to a Roth IRA said they are still undecided on whether they would convert.
Sherman said that this is why it is critical for advisors to follow up directly with investors.
“A lot of people are providing information and a lot of companies are offering Roth calculators, but this is a personal decision for customers,” she said. “This is a personal discussion not a calculator decision.”
Through this initiative, Comfort said Huntington believes that there is a significant opportunity. He said Huntington Investment, which had $7.8 billion in assets under management as of Sept. 30, has pretty aggressively goals for this initiative, but would not specify exactly how much in assets it expected to add.
“There are so many people with two or three or four 401(k) plans from different employers and a lot of these people don’t have a plan for their income after retirement,” he said. “Income planning is a huge need that people have.”
Interested in reading more about the Roth IRA Issue? Check out the Roth Conversion Center