Northern Trust Corp.s retirement consulting unit has launched a retirement rollover service as the banking company looks for more ways to manage assets beyond retirement.
The Retirement Investment Link service lets people in a Northern Trust-sponsored retirement plan roll over assets into a Northern Trust IRA or brokerage account tax-deferred when they leave the retirement plan.
Serge Boccassini, director of product development in the Northern Trust Retirement Consulting unit, said the service, which was started Dec. 19, is the Chicago companys attempt to bridge the gap from institutional services offered to individuals through their 401(k) plans to personalized services offered after a plan participant gets another retirement plan or retires.
"We have a lot of products and services available at Northern that our retirement customers are just not aware of," he said. "We offer mutual funds. We offer self-directed brokerage services, and we can offer personal financial planners. Long-term savings does not stop after retirement."
The service is primarily educational and, with permission from the plan sponsor, Northern Trust is showing investors how they can shift their investments after retirement. Boccassini said Northern Trust is training service center representatives to "proactively point investors in the right direction."
"This is something that the customers, that the participants, were looking for. They want to find a way to continue to invest simply and easily after retirement," Boccassini said. "We want to find a way to pass warm clients from the institutional side to the personal investing side of the business."
Geoffrey Bobroff, president of Bobroff Consulting Inc. of East Greenwich, R.I., said many banks and financial institutions that offer retirement services have been "circling around the subject" but few have developed a strategy or product. He said that with nearly $1 trillion of rollovers expected in the next five years as baby boomers retire, banks lacking a product risk losing a large chunk of assets.
"People are doing a lot of thinking, but no one has shown that they have a compelling package yet," Bobroff said. "I applaud Northern, but I dont know that anyone has found the key to the family jewels."
Other banking companies are considering the development of such a product. Charles Salmans, a spokesman for FleetBoston Financial Corp., said the Boston company would unveil a similar product in the first quarter to let participants roll over their 401(k) plan assets into an IRA or another retirement plan.
Boccassini said Northern plans to steadily enhance the Retirement Investment Link. He said that, during the first quarter, the company would add to the services online capabilities so that people can move funds online from a retirement account to Northern Trusts online brokerage site.
The product helps build "linking capabilities" for investors moving from one job to another or into retirement, he said, as well as for Northern Trust as it links its institutional and personal services.
"This is really the first time we have been able to work together between our retirement consulting unit and other personal services unit here at Northern Trust," Boccassini said. "We have to continue to build on that if we want to compete."