As discussed with purchases by Ascensus, there is further consolidation in the third party administration (TPA) business. The Retirement Advantage, Inc. (TRA), purchased Retirement Planning, Inc. (RPI), a Grand Rapids, Michigan TPA.
The business is heading towards consolidation because of narrowing margins in the business as fees are more competitive and TPA owners have tried to learn how to do more work for less money. It’s a hard proposition, so that’s why many are bailing out so that they could be bought out by a bigger firm who has more flexibility with narrowing margins.
