Are there any TPA firms left that are not in "bed" with one or more investment platform?

[jkharvey]

I guess I'm old school, but I miss the days when as a TPA our focus was on our client and how to help them with their retirement plan needs. It seems that has all but faded away. We deal with brokers, not clients. The platforms use participant money to pay for TPA "conferences". TPA firms use platforms as "sponsors" in their advertising and promotional and even charity events.

Is it unrealistic to think I could find a firm who wants an experienced administrator who wants to work for the client and not for the platform?

Thanks for letting me vent.

[shERPA]

Focus on DB/CB and other sophisticated plan designs, not 401(k) plans. Non-producing TPA shops' 401(k) business is more and more at the mercy of the vendors and advisors, many of whom will not hesitate to throw the TPA under the bus over fees or whenever something goes wrong, regardless of the cause.

Don't blame the TPAs, they are at the end of a very long tail just trying to hang on. Most plan sponsors won't pay the full price of what it takes for 401(k) compliance and recordkeeping, the advisors control the relationship (and have used 408(b)(2) fee disclosure to further beat up on TPAs). In the 401(k) world it is a race to the bottom and in this world the Paychex-type providers have the advantage They have huge distribution so they can afford to lose the small percentage of clients who will get audited and tagged for non-compliance, and they contract away their responsibility for compliance with ERISA or the IRC, (read their contract, it is right there in Section 7) - they just process what is sent to them.

[jkharvey]

Thanks. That helps explain a lot of it. I still don't understand, however, why the TPA has to "accept" these conference trips and other things. Isn't there still some room in there for integrity?

[shERPA]

A TPA doesn't have to accept anything, be it trips, revenue sharing, a can of popcorn, etc. Trips with all the vendors we work with have been scaled way back over the last few years and are mostly just another business trip. Yes it might be in a nice spot and there may be a couple of activities in the afternoon, but it is still business. Why go? Relationships. Business is still relationship driven and if a TPA is going to hitch his or her wagon to a vendor, it is in the TPA's interest to feed, nurture and maintain relationships with key people. The vendors see it the same way, they are looking at TPAs as a distribution channel and a key driver in client retention, so they also have a vested interest in the relationship, which is why they sponsor these conferences. They send their key people to them at great expense, and they want to see their key partners there.

[Gadgetfreak]

In my experience, a non-producing TPA that also does in-house recordkeeping is probably one of the least likely to have an exclusive alliance with a vendor. Vendors won't send any business their way because they are in competition with them. And, for the cases where they are TPA/admin-only, they rarely control which vendor is used because they are non-producing as the adviser will usually dictate the platform. Yet, if the reputation is built on integrity and excellent service, the clients will come.