Myths and Truths About Working With a TPA

October 5, 2021
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We saw a lot of interest in our recent Q&A on reasons to team up with a TPA. To satisfy the demand, we’re tackling another third-party administrator topic. Ready to examine the myths and determine if a partnership is the right move for your business? Here we go.

The myth: Unbundled plans are more expensive than bundled plans.

The truth: An unbundled plan with a TPA is not more expensive than a bundled plan — for plan sponsors or advisors.

We partner with TPAs to help us service plan sponsor clients. A TPA can provide local, expert service and deep technical support. For the work that they do, we offer partner payments to our TPAs. They can use the payments to offset the fees they charge clients, so there’s no additional cost to plan sponsors.

“The client isn’t going to be billed more. We’re picking up a little bit of that cost,” says Rita Taylor-Rodriguez, national TPA sales director at The Standard. “Sometimes, bundled quotes are more expensive.”

Rita Taylor-Rodriguez

Rita Taylor-Rodriguez

Advisors who are concerned about pricing “haven’t worked with us yet,” says Taylor-Rodriguez. Chances are good that advisors have had “clunky” relationships with previous recordkeepers.

“Other recordkeepers may not be as thorough as we are. They may not collect and validate data like we do. They may not have a data specialist team,” says Taylor-Rodriguez.

Writing business with less reliable recordkeepers can mean more work for advisors. Some may make less money because they’ve had to pick up the pieces when recordkeepers have fallen short.

“It’s important to choose a reliable recordkeeper and partner. We’re easy to do business with,” Taylor-Rodriguez says.

The myth: It’s more complicated to work with a TPA. I don’t have time to figure it out.

The truth: With the right partnership, you and your clients can experience a more efficient and even higher level of service. That’s because a recordkeeper like The Standard can provide services that complement the TPA services.

On top of that, you can win hero status for bringing this option to your clients.

“Writing unbundled business with The Standard looks like one-stop shopping,” Taylor-Rodriguez says.

The myth: Advisors can’t make money working with a TPA.

The truth: Referrals from TPAs can lead to lucrative opportunities — and lots of them. Think of TPAs as members of your personal board of directors. They bring resources to the relationship. They include you in their networks. They give your name to clients looking to change advisors. If these opportunities interest you, partnering with a TPA is the right move.

The myth: TPAs only work with small employers.

The truth: TPAs take on plans of all sizes. They look at the complexity of the plan and the work they need to do — not the size of the plan.

 

Talk to your retirement plan consultant at The Standard for more information about TPA partnerships.