When you’re a financial advisor and working out proposals for potential plan sponsor clients, pricing is an important thing. This is the case especially when we’re in an environment of fee disclosure, narrowing margins, and a highly competitive environment.
However, financial advisors need to move past the idea that a third party administrator (TPA) is nothing more than a price. They are more than just a placeholder for a fee. The advisor needs to understand that the TPA is something more than a service that has a fee attached. What a TPA selling is different from what other TPAs sell, they aren’t selling the same tube of toothpaste. Every TPA has its own level of service and some have a better service than others. The point is that the level of service is more important than the fee. As I always state, a good TPA is the biggest difference between a plan having major compliance headaches and not.
