Speaking with a panel at the 2012 PLANADVISER National Conference, Kevin Seimet, sales relationship manager at Nationwide, noted several good reasons for advisers to partner with TPAs:
- They have technical expertise and know the business inside and out, so they can keep plans qualified;
- They can help with plan design – a good TPA will ask questions and make plan suggestions;
- They offer day-to-day service support that helps plan with administering withdrawals and loans and helps with plan audits;
- They are a good source of leads or referrals for advisers; and
- Their local presence and experience with sponsor hand-holding are good selling points for advisers.
Jeff Schreiber, vice president of business development – TPA at Principal Financial Group, added that TPAs’ experience is something advisers can leverage because TPAs have probably seen any problem sponsors may experience.Sean Deviney, retirement plans specialist at Provenance Wealth Advisors, said advisers can differentiate themselves by being able to offer or suggest the best plan design for sponsors with help from TPAs.
He said the criteria for a good TPA partner include:
- They are non-producing and strictly do administration, so there is no selling and competition with the adviser;
- They have experience with different plan types and combinations of plans; and
- They are responsive – if advisers recommend them to plan sponsors, they want to know how quickly the TPA will respond to the client.
According to Seimet, it is a good idea for an adviser to have a contract with the TPA to spell out the duties for each. Gredys, who moderated the panel, added that it helps to have communication in place that shows they are working as a team.
Schreiber added that advisers should have deep partnerships with one or two TPAs with presence in various regions. They do not want to spread clients among a number of TPAs; getting just one or two clients is little motivation for them to partner with an adviser.Deviney suggested that advisers look through their book of business and consider new regulations. For example, fee disclosure regulations provide an opportunity to approach clients with plan design suggestions, so advisers should look to their TPAs for ideas about how to improve clients’ fee ratios.