There has been tremendous consolidation in the retirement plan marketplace, especially in the last couple of years. It’s been that way since fee disclosure regulations were implemented in. 2012. In the past week, two third-party administrators (TPAs) that I’ve referred plans to were purchased.
Consolidation is expected and there are several drawbacks to it. There is less competition and there are fewer jobs. While everyone I knew at Oppenheimer survived the absorption into Invesco, I was sad to see the LinkedIn posts of employees who were put on waivers. I’m torn also because I see working with certain providers is like going to your favorite bar. Like the bartender who knows your drink, certain plan providers know how you like things and of consolidation makes everything the same and makes the servicing of plans impersonal, it’s going to affect the way you do business.
I have to say that I won’t be consolidating anytime soon because I’m always a contrarian, but I do have some concerns on what impact it will have for years to come.