Five Reasons to Consider Teaming with Local TPAs

Successful financial advisers who work primarily with employer-sponsored retirement plans, also known as specialist advisers, guide plan sponsors through the sometimes-complicated landscape of managing their company retirement plan.

Specialist advisers work with retirement plan providers that they like and trust to handle their clients with care. Advisers can choose to work with “bundled” providers that provide recordkeeping, investment platforms and administration, or opt for an “unbundled” solution by adding a local third party administrator (TPA) into the servicing mix.

Third party administrators (TPAs) add value for plan sponsors, participants, and especially for financial advisers—both during the sales process and over the life of a plan. I spoke with some extremely successful specialist advisers to learn how working with TPAs adds efficiency to their business models and provides customers with a higher level of expertise.

Here are five reasons you may want to seriously consider working with a TPA:

TPAs have specific expertise that will benefit your clients.  

TPAs are, by definition, administration and retirement plan design experts. Plan advisers typically have different areas of expertise, with many concentrating on investments, direct client servicing, and participant education. So there’s sometimes the temptation to minimize the importance of good plan design, as if that’s a commodity. Many savvy advisers feel the investments are the same wherever you go, but really good, insightful plan design is a rare find.

“Every provider has good funds and every provider has terrible funds. Plan design makes a plan work or not,” says Robert Sweat, CFP of Principal Financial Group, a veteran financial adviser with more than a decade of experience in the defined contribution market. “In my experience, funds just don’t help to differentiate one plan from another. Because every client is different, making a plan work comes down to plan design.”

There’s also a benefit to showing prospective clients you have the wherewithal to assemble a team of experts, all on their behalf. “I don’t want to be perceived as a jack of all trades,” says Sweat. “I want the client to know the TPA and I have different roles—my job is to recognize the set of facts for a given plan, so I know which expert I want to bring in.”

In a sales-driven environment, the value of administration is often overlooked, according to Charles Williams, a financial adviser with Sheridan Road Financial, LLC, a leading investment consulting and retirement advisory firm. “Most clients focus on investments, and don’t really value the administration component,” says Williams. “But let’s face it, administration is not the exciting part of a plan…until you find a TPA who does an excellent job, then you see how clients react when their plans outperform their initial expectations.”

TPAs can improve outcomes for both sponsors and participants.  

Part of the reason I love working in the retirement plan business is because you can see a tangible result of your efforts in the form of participant outcomes. Sure, there are times when we can also help save plan sponsors money for their companies—but it’s helping participants that provides me with a tremendous amount of satisfaction.

Many financial advisers feel the same way. “Personally, I’ve made a conscious decision to work with smaller companies and provide more value. That way, your impact can be seen and felt,” says Aaron Taylor, a registered representative with Lang Financial Group, Inc. in Cincinnati, Ohio. 

“Our TPA partners are of the utmost importance,” continues Taylor. “We do a lot of work with plan design, profit sharing allocation methods, cash balance plans—whatever a client needs to maximize the retirement benefit for themselves and their employees. To that end, a proficient TPA is absolutely invaluable.”

Taylor shares a specific example to drive the point home. “One of our recent clients, a large manufacturing company, was struggling with how to reduce spending. We helped save them over $80,000 in just six months. Plus, they didn’t cut any services to their employees, nor did their employees have to pay more. This wouldn’t have been possible without the work of our TPA partner.”

Local, personalized service makes clients very happy and also benefits your business.  

The more advisers I talk to, the more I see that those who have tried working with TPAs tend to stick with it. “I try to work with a TPA in almost every situation,” says Todd Colburn, CFP, a wealth management adviser from Nashville, Tennessee. “There are two reasons why. First, I prefer a component-based approach, where any underperforming role—including mine—can easily be replaced without disrupting the roles that are working well, and second, TPAs are just more capable of conforming to the needs and requests of my clients.”

In some cases, winning a new plan comes down to hands-on service. And there’s nothing that plan sponsor clients like more than an administrator who’s accessible and lives in their own backyard. “Bundled providers may do a fine job, but our clients like to work with someone on a local level,” says Sweat. 

Local TPAs who are readily available for client meetings can be a distinct advantage. “The bundled plan administration might be just as good as a local TPA, but if they’re not here on the ground then it isn’t helping me that much. They can’t be in the meetings, but a local person can. Something I thought couldn’t be done, it turns out it could be, and that’s all because the TPA was local and able to be in the room with me,” says Sweat.

Local service is nice, but the crux of the matter is about building relationships—and that’s just easier when you can meet face-to-face once in a while or quickly if a need arises, according to John Spach, AIF with 401k Advisors & 403b Advisors out of Los Angeles. “TPAs need to have real relationships with clients; they’re not just there for compliance testing.” Quite the contrary, says Spach, “TPAs are the frontline staff, and as such need to develop relationships.”

TPAs can help you close sales.    

When I was in a sales role, I would always bring a local TPA to a finals meeting. Not only could they answer very technical questions and make specific recommendations about plan design right on the spot, but they made me look good. And frankly, they could zero in on issues and concerns that I couldn’t have done by myself.

Seasoned TPAs know the right questions to ask on a sales call, says Taylor. “TPAs really understand client needs—and once we start talking about plan design, a good TPA is asking questions about the questions.” Those insightful questions can really give a prospect the impression of how thoughtful a partner this TPA can be. “Sometimes that can make all the difference to winning a plan,” he says.

A successful TPA partnership can help your business grow and thrive.    

John Spach has a wonderful relationship with a long-time TPA partner and they’ve struck a nice balance as true professional partners. “When we first started working together in the old days, [my TPA] would spew out pension terminology and I would generate the IPS, but it’s as if we were speaking two different languages,” Spach explains. Over time, however, that relationship grew into a successful symbiosis. “Through the years, we moved from being reactive to client needs to being on the same page about how to approach a case. Now, we both enjoy leading with automatic enrollment and automatic escalation recommendations to win business and design plans that produce results.”


Deb Rubin serves as senior vice president of TPA and specialist adviser distribution for Transamerica Retirement Solutions. She specializes in helping professionals and organizations build their brands, fine-tune their messaging, identify and execute on business development strategies, and improve efficiencies. She is also a champion for overall retirement readiness in America. 

NOTE: This feature is to provide general information only, does not constitute legal advice, and cannot be used or substituted for legal or tax advice

Any opinions of the author(s) do not necessarily reflect the stance of Asset International or its affiliates.