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RIA firm that owns a TPA firm as well


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We are an RIA firm that also owns part of a TPA firm. The question is dealing with the John Hancock Forum IA (Installation Allowance) program.

We hired a prominent ERISA attorney for an opinion about the IA payments a TPA receives from John Hancock. We were told the IA payments must be 100% offset to the quoted fees if not, any fees above those must be credited back or reimbursed to the client... otherwise it is a prohibitive transaction becuase we are a RIA.

Another TPA firm were told a way to collect these fees without reimbusement because they had the same questions.

Not sure were to tunr. We cannot be the only RIA firm that owns a TPA that might be facing this. Just curious if there is anyone else facing this and have found any resolution or how they are handling the fee disclosure.

Is there a way we can obtain a private letter ruling or somehting in the same realm to hang our hats on?

Any suggestions would be greatly appreciated.

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Did you have him cite you anything that supports his position ?

Did this other TPA firm explain what they do? Is there a difference compared to what you do?

George D. Burns

Cost Reduction Strategies

Burns and Associates, Inc

www.costreductionstrategies.com(under construction)

www.employeebenefitsstrategies.com(under construction)

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There is a plan count requirement each year, plus the size of plans matter. Being a small TPA, that amount could be $0.

Let me retract what I said earlier that the inability to determine the amount is the main problem... the main problem is that an RIA, also owning a part in a TPA firm, is being paid as an advisor and is receiving indirect compensation from the plan via these TPA payments. That is what we are beign told is a prohibitive transaction.

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