Editor's note: This article appears in the latest Plan Consultant Magazine. Click here to read the new magazine issue.
Two of the most important parties to a successful retirement plan are the third-party administrator (TPA) and the advisor. While other key pieces operate somewhat stand-alone, the relationship between the TPA and advisor is critical.
As the TPA industry becomes more remote in nature, it’s increasingly difficult to find ways to build relationships, facilitate new ones, and effectively communicate the value TPAs provide. So, let’s dive into the value and, in turn, cover how to market yourself and your business to maintain current relationships and appeal to new referral sources for your business. To make it easy, let’s talk about five key areas in which TPAs bring value to their advisors.
There are many things in our day-to-day work life that we can control, like who we work with, what hours we work, and the processes with which we work. However, one thing we cannot control is time. There are only so many hours in a day, and regardless of how you slice and dice them, you cannot change the number of hours in a day. Making the most of that time is critical for anyone. This leads us to the first of our five areas: Getting time back.
1. Making the Most of Your Time
Overwhelmingly, when advisors were asked why they chose to partner with TPAs in their practice, the answer was almost always along the lines of “working with a TPA lets me maximize my time and provide the best service to my clients.” It’s incredibly important to respect one another’s time, which includes the request for information and assistance from your counterparts. If everything is an emergency, nothing is an emergency. And the tone is everything. However, when both parties feel confident in their partnership, they know that if they reach out for help, they’ll get the expert help they need in a timely manner. Make sure you are that partner of choice.
Speaking of expert help, that leads us right into our second area of focus: Being the retirement plan expert.
2. TPAs Are Retirement Plan Experts
Let’s face it, everyone likes to look smart in front of their clients and peers. Now, think about how many rules and regulations have changed over the last two years alone. As TPAs, you stay on top of IRS and Department of Labor (DOL) updates and provide consistent information to keep the advisor community informed of new developments as they arise.
While many specialist advisors may have a good understanding of the complexities of the retirement industry, it is rare that anyone is better prepared than the TPA. This is your area of expertise, and one that your advisors should lean on—ideally to the point of including you in the client meetings to make the sale. With a TPA in their corner, advisors are able to have more in-depth conversations about the complexities of the retirement plan without worry. Plus, you are establishing the partnership element from the very beginning with the client.
On to the third area of focus, and with such a huge focus on growth: Referrals.
3. Improving Sales and Referral Opportunities
We are all proud of the reputations we build in our industry, and we work very hard to maintain them. So if you're great at your job and you partner with someone who's great at theirs, imagine how that could double your reach for referral business.
It seems like a no-brainer, right? How many new plans do you expect on an annual basis from your top referral sources? Do you see those numbers consistently? Have you ever asked your advisor why they continue bringing business your way? If you haven’t, you should.
Know what you bring to the table and communicate it proudly! While your advisors continue bringing business your way, be sure to continue sharing leads back in the other direction. Staying top of mind with your key advisors is much easier when you’ve recently sent a referral back their way.
While we need to focus on sales, we know we have to maintain business as well, which leads us to our fourth area of focus: Retention.
4. Retention
We love new business, but if we don’t have the retention to back it up, how successful are we?
We all know the value of “stickiness” among our clients. The more value we provide to them, the less likely they are to shop around. No one wants to make a habit of constantly jumping service providers, so feeling like their business matters to you both is key!
Even more important, communication is crucial among the three of you (client, TPA, and advisor). We all manage different businesses, especially between the TPA and the advisor. However, a good working relationship between the two leads to growth in business for all involved as the referral agreement and reputation for working well together is shared between all parties.
Many successful business owners, when asked about their success, are quick to mention the army of people behind them that helped them get to where they are. And that brings us to our fifth and final key: Building.
5. Building Your Retirement Army
It’s been said about a million different ways at this point. TPAs and advisors are like peanut butter and jelly or Batman and Robin. They just work together when you find the right pairing.
So, how do you make sure you and your advisor are the right fit for one another? Identify partners that work the best for you. The right partners align with your values and those of your clients, your work style, and your overall team and business strategy.
Mutual respect is crucial for a successful partnership. If at any point that is in question, you need to take a hard look at the relationship. It is okay to set boundaries and not budge on them. Just make sure they are clear to the parties with which you partner. You may be amazed how much you are respected for sticking to your guns on the things that are most important to you.
No one should expect perfection. Issues will surely arise over time—it’s how you handle them that makes the difference. Staying in communication with your advisor and client as issues come up is key. As long as you are on the same page and working on a solution in tandem, the relationship will continue to thrive.
Now that we’ve established the five key areas in which TPAs bring value to their advisor relationships, let’s close out with a few points to remember on how you can continue to promote your value.
1. Stay true to your values, always. If something seems sketchy, trust your gut and kindly pass.
2. Your fees are your fees. You do great work for those fees, and they aren’t negotiable. If they want the work done cheaper, I’m sure someone out there is willing to do a lesser job, but not you.
3. Communicate often and openly. Remind your partners why working with you is the best option.
4. Remember, you are the expert in your field. Make sure that it is both understood and appreciated. Your time is just as important as anyone else’s. Boundaries are okay and expected to be set for everyone.
5. Make sure they know what you’re doing to go the extra mile. While it may not directly affect them now, it goes a long way for the relationship in the long run.
It’s important to remember that what you do matters—every single day. Don’t ever devalue that work to fit someone’s need or desire for something less. Partnerships matter, and what you bring to the table is so important to the success of the retirement plan.
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