Sixty-one percent of leading mutual fund companies are taking advantage of the provision in the 2010 Tax Increase Prevention and Reconciliation Act that allows investors to convert a traditional IRA to a Roth, by proactively educating investors, a Corporate Insight analysis found.
Fifty-five percent are offering interactive calculators, and 45% have added educational articles about Roth IRAs to their websites.
The new law creates an enormous opportunity for mutual fund firms to educate clients about the benefits of conversion, while potentially increasing Roth IRA sales, Corporate Insight said.
“These important legislative changes create a clear tax-related opportunity for some investors,” noted Michael Ellison, executive vice president of Corporate Insight. “It’s up to mutual fund firms to ensure that clients understand the issue, so that they can make the right decision regarding conversion. It’s an ideal situation when a firm can help a customer make an informed and constructive investment decision, since this has the potential to solidify the relationship between the firm and the client.”