The plan advisor-recordkeeper-TPA trifecta is like a three-legged stool—each supporting the plan sponsor with expertise and counsel. Without one of these critical partners in place, the stool is broken and no longer able to serve its function or fulfill its mission. That’s why, when partnering with a TPA, it’s important that all three legs of the stool are working together.
There is a growing demand for Third-party administrators, or TPAs, and those who work alongside them every day know and recognize their value. Working with a TPA helps to ensure that retirement plans meet legal and regulatory requirements, as they support and collaborate with the recordkeeper and advisor to provide clients unparalleled service and consistent process.
TPAs are highly skilled in managing the day-to-day aspects of a retirement plan. They provide expertise in plan design and consulting, and ensure plan compliance. Beyond the day-to-day administration and maintenance of any given plan, TPAs play an important role when they collaborate with the plan adviser and recordkeeper.
Here are some best practices for advisors in setting up your partnership with your TPA and recordkeeper:
- Clarity Around Roles & Responsibility—It is important to choose a TPA and recordkeeper who collaborate and work well together, by understanding their respective roles and responsibilities, having clear and consistent processes, and effectively and easily sharing information. A good recordkeeper will ensure the TPA knows what their capabilities are so that contracts are straightforward in terms of who owns certain responsibilities and what limitations, if any, exist.
- Reliable Data Between Partners—Data is critical for proper administration of the plan. Recordkeepers must supply reliable data to TPAs to execute compliance testing, conduct Form 5500 preparation, and review participant transactions. Today, living in an ever-increasingly virtual world, TPAs rely on recordkeeping technology to handle the heavy lifting and enable on-demand services, when needed, to meet the new flexible workforce.
- Experienced Problem Solving—Many TPAs are expert problem solvers who handle everything from the routine to the complex in order to resolve issues that might be a drain on a plan advisors’ practice. TPAs are advocates who can help the plan advisor navigate the complex rules and provisions applicable to the client’s plan. The best recordkeepers work as an extension of the TPA’s team.
- Technical & Local Expertise—Since a TPA’s primary focus is plan administration, they oversee plan compliance, administration, consulting, and innovative design options. They are known to bring valuable technical support to the table. TPAs add a layer of local expertise in servicing clients’ needs from plan design consulting to regulatory expertise and compliance testing solutions.
- Flexibility and Range—TPAs are varied and many have the skills and range necessary to support plans of all sizes with the capability to manage the day-to-day plan responsibilities, which is essential for clients who do not have the resources dedicated to plan management. For larger, more complex plans, TPAs can offer deep technical expertise to help with sophisticated plan design, compliance consulting and regulatory updates.
As advisors look to build their practice, they may want to team up with TPAs and recordkeepers who seek to provide white glove service. Through shared values and commitment to the plan sponsor, these three individual experts have the opportunity to combine forces in service to their clients, and help each other scale their businesses and grow long-term client relationships along the way.
Rita Taylor-Rodriguez is a TPA Sales Director at The Standard and a registered representative of StanCorp Equities, Inc. With more than 30 years of experience in the financial services industry, she has held sales executive positions as well as roles as a regional channel manager and brokerage manager. Rita holds the Certified Plan Fiduciary Advisor and Fi360 Accredited Investment Fiduciary designations, along with FINRA Series 6, 63, 26 and 65 licenses.
