Retirement Plan TPAs Gaining Market Share
WEST HARTFORD, CT, April 14, 2009 -- More than 40 percent of plan sponsors consider a Third Party Administrator as their primary Defined Contribution Service Provider according to the latest report from Retirement Research Inc. The report also finds that about one-half of all new business written by product providers in 2008 used a service model that includes Third Party Administrators (TPA's). The report illustrates how today's market conditions are influencing both TPA and provider revenues and causing both to rethink opportunities and efficiencies in working together.
The new RRI Market Monitor Series Report, "Working with Today's Retirement Plan TPAs -- Opportunities and Challenges," finds product providers are focusing more attention on partnering using a local TPA to deliver compliance and administrative services and on TPA's as a distribution channel.
"This report provides a look at where product and service offerings are today and where we believe they are going," says RRI Managing Principal, Ronald Bush. "We are excited to offer information of this caliber that discusses trends in the context of understanding the services TPAs provide, the business models in which they operate and their relationship to plan sponsors, national product providers and investment advisors with whom they work."
Also included in this report are detailed descriptions of service functions related to DC plan servicing and key TPA reimbursement programs offered by major product providers.
"In addition to tracking industry trends we want this report to help providers understand the hurdles a TPA may face and the services they offer," says RRI Director of Consulting Services, Kent Novell. "More and more we find the industry does not understand just what a TPA can do to help them or how to maximize their relationships. For example, more than 80 percent of a TPAs business comes from internal sales and local referrals- not national providers. This is a growing trend. We hope to offer some insight with Working with Today's Retirement Plan TPAs -Opportunities and Challenges."
Many product providers now regard Third Party Administrators (TPAs) as important service partners and as a significant distribution channel. Advisors focusing on the retirement market are moving toward a fee-based compensation model and RIA status; increasingly these advisors are partnering with TPAs to offer administrative and investment management services to plan sponsors, often in competition with packaged product providers.
About Retirement Plan Research
Retirement Research, Inc. focuses exclusively on the retirement services industry, offering research-based consulting services, profiles of leading providers and products in the defined contribution market and a suite of interactive web-based competitive analysis tools covering both product and investment offerings. RRI assists insurance, investment and financial services companies in addressing strategic issues, solving marketing problems and enhancing distribution effectiveness. For more information visit www.rricentral.com.
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