When an advisor selects a TPA to administer a plan, it is a conscious or unconscious extension of the advisor’s brand. Obviously, the financial performance is key to the combined value proposition, but simultaneously, if the plan falls out of compliance, the client relationship is likely doomed. This means the financial advisor and TPA brands are intrinsically connected.
TPAs that are chosen by an advisor to administer plans will likely fall into one of two camps. Firstly, the low-bidder or secondly, a partner who is in alignment with core values and delivers a consistent service level over a period of time.
We all know those advisors who race to the bottom when trying to win the business. Everything is a rush; they use terms like “can you sharpen your pencil”, or “is there any wiggle room”, and they expect the highest priority level of treatment. In the beginning, it can feel like growth and increased revenue for your business but after a few cycles it ends up causing stress to your team and eroding your margins. It is not good for the long-term health of your TPA business to maintain relationships with these types of advisors. While tempting, you should avoid these advisors like the plague. Do not waste a single minute trying to convince an advisor about the value of a TPA. If they don’t understand it, move on, over time they are going to be very bad for the plan sponsor and bad for your business.
Furthermore, TPAs should be confident in their value proposition and let the bundled providers come in as the low bid. Let the Plan Sponsor and advisor experience that level of service, communication, and ultimately risk. Middle to low market TPAs should not try and change their names or perceptions as consultants, they should double down on the quality of service, mitigation of risk, and demonstrating the alignment of core values.
The best advisors see their TPA as a partner who is committed to delivering a great service that the plan sponsor values. These advisors are thorough, patient, humble, and ambitious. They will often be similar in size and scope to your TPA operation and be happy to bring you into meetings and encourage you to demonstrate your expertise. They know where their value is, and they understand yours.
I often hear a lot of confusion about the most effective marketing tactics to support the advisors. You must demonstrate that you share their values and deliver the level of service that they believe the plan sponsor needs. In practical terms that means jumping in a helping with proposals, cost estimates, create content, or even customer pitch decks. Get in the trenches and help the advisor win more work. From a servicing standpoint, over-communicate with the advisor. Make sure they are up to speed with the plan and how it’s doing. PensionPro’s PlanSponsorLink provides a plan scorecard that TPAs can share with their advisors. It gives all the critical information that they need to understand the plans. Having a unified view of a plan is critical to developing a great partnership. Finally, all advisors have their go-to TPA (The one that if they want to impress or service the Plan Sponsor to a high level they call). Don’t just ‘find and align’ but support these advisors with everything you have.
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