Welcome to the New Morningstar.comSee what's new
Advisor Insights

Should You Manage Health Savings Account Assets?

W. Scott Simon

Is there a sizable opportunity for investment advisors to enter the health savings account marketplace to gather, invest, and manage assets? But of course: Only 15% (about $7 billion) of total assets (about $45 billion) now residing in HSAs are actually invested, as opposed to merely sitting in bank accounts/cash accounts/cash equivalent accounts. Hence, 85% of such total assets are still up for grabs (about $38 billion), with an anticipated annual compounding rate of around 25%.

No doubt a good part of why such a low portion of total HSA assets is invested is that many HSA holders use their balances every year, which makes it tough to even begin accumulation of assets for long-term investment. Another factor is that account holders simply haven't been educated about the investment products offered by some HSA providers.