Investment Professionals May Miss Critical Opportunity to Retain Millions in Assets and Enhance Client Relationships

October 25, 2012

JERSEY CITY, N.J.— 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 Each year, billions of dollars in RMD funds are withdrawn.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.

About BNY Mellon's Pershing

BNY Mellon’s Pershing and its affiliates provide advisors, broker-dealers, family offices, hedge fund and ’40 Act fund managers, registered investment advisor firms and wealth managers with a broad suite of global financial business solutions. Many of the world’s most sophisticated and successful financial services firms rely on Pershing for clearing and custody, investment and retirement solutions, technology, enterprise data management, trading services, prime brokerage and business consulting. Pershing helps clients improve profitability and drive growth, create capacity and efficiency, attract and retain talent, and manage risk and regulation. With a network of 23 offices worldwide, Pershing provides business-to-business solutions to clients representing more than 6 million investor accounts globally. Pershing LLC (member FINRA, NYSE, SIPC) is a BNY Mellon company. Additional information is available on pershing.com, or follow us on Twitter @Pershing.

About BNY Mellon

BNY Mellon is a global investments company dedicated to helping its clients manage and service their financial assets throughout the investment lifecycle. Whether providing financial services for institutions, corporations or individual investors, BNY Mellon delivers informed investment management and investment services in 35 countries and more than 100 markets. As of Sept. 30, 2017, BNY Mellon had $32.2 trillion in assets under custody and/or administration, and $1.8 trillion in assets under management. BNY Mellon can act as a single point of contact for clients looking to create, trade, hold, manage, service, distribute or restructure investments. BNY Mellon is the corporate brand of The Bank of New York Mellon Corporation (NYSE: BK). Additional information is available on www.bnymellon.com. Follow us on Twitter @BNYMellon or visit our newsroom at www.bnymellon.com/newsroom for the latest company news.