ABSTRACT
In financial marketplace, there are basically three types of "shoppers’’: Savers, Searchers, and Investors. In order to meet the preferences of Savers, banks and thrifts continue to dominate the individual retirement account (IRA) market. Almost two-thirds of all households with IRAs have contributions in a bank or thrift; one-half of all IRA assets are in a commercial bank, savings and loan, or savings bank. IRA owners appear to be even more rate-sensitive than fee-sensitive. In fact, when selecting their most recent IRAs, 35 percent of all owners named rate of return as their foremost concern. Many households are attracted to the self-directed IRA because of its inherent flexibility. Indeed, they look for flexibility in both the institution and in the investments. Roughly one-third of all households with self-directed IRAs select institutions and investments based on the flexibility of the self-directed IRA investment structure. Most households choose self-directed IRAs so they may actively participate in the management of their retirement funds.
