Earlier this week, Jake Rushton, from TrueNorth Retire and 401Ja(k)e, invited our own Coleton Hutchins, QKA to discuss the top three qualities to look for in a TPA. Watch, listen, or read the conversation right here.

JAKE: Welcome to the 401 Ja(k)e show! I’m glad you are here. This is going to be a great one. We’re going to dive into TPAs and the top three things to look out for when you’re choosing a good TPA, how to do it, with special guest, Coleton Hutchins. Can’t wait!

Before we jump into that, I’ve got two quick things. First and foremost, make sure that you subscribe. I’m going to continue to bring content. I’m found that more people listen when we have guests, so I’m going to double down on that. I’m finding that people want to hear different stories and different ideas and they don’t want to just hear me talk, so I’m going to bring on different guests.

Number two, the Club Sesh is still going. Every three weeks, we get together as a group on a zoom meeting. I know you’re sick of zoom meetings, we’ll figure something else out if you just can’t handle it anymore. But this Friday is going to be content creation. Now, I know most of you are like “oh, Compliance. They’re going to stop me. I can’t do it.” We’re going to talk about how you get around that. We’re going to talk about what content creation means and how you can make that work for you and your personal brand. Because a stronger personal brand, or another term for that is your reputation, will lead to more opportunities no matter what your role is. If you’re a wholesaler, if you’re an advisor, if you’re a TPA firm or recordkeeper, I don’t care, you have a reputation that ties directly to you. One way to get more eyeballs, or more audience, on you and what you can do to provide value to people is by creating content, posting that content and how to do that, and navigating the compliance, I guess, chains that you might be in. This is 2020. We are all at home. Content has to be your thing. So we’re going to talk about that.

All right. Welcome to the show. Enjoy it! Coleton brings some real fire. Some ideas that can help you partner with some of the best TPAs out there. Let’s go.

Welcome everybody to the 401 Ja(k)e Show. I’ve got a special guest today. I am so excited about this because you know how much I love Third Party Administrators. TPAs make or break your practice. I really believe that. So I’m constantly finding new people in this industry who, I think, are a little hidden in the administrative world. I like to bring them out and highlight some of the things that they’re doing and some of the ideas they have because there’s a lot of talent hidden in TPAs all over the country.

Today, we’ve got Coleton Hutchins. He is a, uh, I don’t even know your title. I’ll let you introduce yourself, but Coleton is an All-star that I’ve met who is doing a lot of marketing. You’ll see him all over Linkedin, so I’m sure you’ve seen his name pop-up, possibly, if you’re in the 401(k) industry. If you’ve followed me, you’re probably going to see Coleton somewhere.

So, Coleton, give us the rundown. Give us a little bit of a background, who you are, where you came from, your day-to-day what you do. Then we’ll dive into our topic today.

COLETON: Ok, yeah. Thanks for that introduction, Jake. Very glad to be here. Like he said, my name is Coleton Hutchins. I work for The Ryding Company based out of Southern California. My current title is New Business Coordinator and Social Media/Website Strategist. That’s kind of my secondary role. My primary role is New Business Coordinator.

In that role, I do function to pretty much help any new clients that are onboarded from our sales team and give them a warm transfer to the administration team. A lot of times, just building relationships and service levels that they have first experienced when they enter our doors.

JAKE:And a little follow-up to that. My question is, when there is a tough question. You get hit with a lot of different scenarios, right, as a TPA. Like you’re the one that’s going to get hit with like: is this a control group, is this affiliated? There’s a lot that comes up. How do you handle that? I know you’re not, you’ve got a lot of experience in this industry, but not a ton, right? So how do you handle when you come across new scenarios? What’s kind of your, I guess, process when that happens?

COLETON: Ya, so you know, it’s not a surprise to come across unique experience especially when I’m bringing on takeover plans. So, fortunately, we’ve got a compliance department and director who I work very closely with. Who has been in the industry for quite a bit longer than myself. She’s been in there for almost three decades now – probably over three decades. So, you know, yeah, she’s got a lot of experience and it’s hard to stump her. While I might be stumped myself, I have great resource internally that can shed a lot of light in answering client’s questions.

JAKE: Nice. I think that that role that you’re in is definitely one that, every single day, you’re going to learn something. I think that’s pretty fun. I mean, it doesn’t really get boring because you’re going to get hit with something new every day.

COLETON: Yeah, yeah. Just when you thought you had learned it all, you learn something new

JAKE: Yeah, I mean. I can have that same problem, but I turn to the TPA, right? Like that’s where I turn. So you being that person I’m turning to, that’s a tough position to be in. And I think a lot of times because we expect you to have the answer. It’s really important that you have the support behind you because no one has all the answers I’ve found. Even the most experienced people can get stumped. So that’s exciting you’re doing that.

How did you end up there? I’m always fascinated by someone’s path to get into the TPA world because I don’t think anyone decides “hey, I’m going to go work at a TPA.” Like that just doesn’t happen. So how did you get there?

COLETON: Yeah, I know. That’s exactly right. As a matter of fact, I had my heart set on becoming an accountant. So when doors were closed for that, I just found myself in a couple different opportunities ironically with new business. I mean each of those, so Pacific Life in Life Insurance. AIG working on a variable annuity product. And then, I actually applied for this job with The Ryding Company because it was closer to my house. So I was kind of sick of the commute, you know. Being in Southern California, anytime you can cut that down, it’s great. So now I don’t even have to ride the freeway to get there. But, you know, I’ve been here for about three years now. Learning a lot and absolutely loving the company that I work for.

JAKE: Awesome! So you did a little bit of annuity work in the past. What are your thoughts on annuities inside of a 401(k)? You weren’t expecting that question, so you don’t have to, you weren’t prepared for that one.

COLETON: You know, I think I can point to kind of the way that the market has been over the last year. It presents some unique challenges. We generally like to recommend not having annuities especially for Defined Benefit Plans. But, you know, we just inform our clients and inform our advisors of what we prefer. But, you know, it’s ultimately up to them.

JAKE: Yeah. I’m at the same feeling. I don’t like to just shut the door completely even though I’m not a fan of annuities really at all. Very, very few scenarios will actually make a lot of sense. And so, for the masses it doesn’t. And then, I get the concept of “well, a target date is kind of misleading.” It says there’s a date you think you can retire, but you’re not really having any guarantee. So I understand. So I’m not like not open-minded, so we’ll see where it goes. I think that’s interesting that you have that background. I’m sure that one was a tough one too. Because annuities, every single one is so different. I don’t envy that position that you had.

COLETON: Yeah, no, they’re definitely challenging, complicated products. You know, they’re different for everybody and certainly not the right option. But that’s not to say we should eliminate it altogether. So just keep that door open just in case

JAKE: Yeah, I mean, it’s always fascinating what we can come up with as an industry and the different products. And so, I think it’s good to continually explore what is happening and understand it. When I see people bashing 401(k)s, I always pause and listen and try to understand what is motivation that they are trying to do. I don’t look at 401(k) as a product. I look at it as an account type. When someone is looking at it like a product and trying to hit it say you shouldn’t invest in a 401(k). Well, do they really understand what it is? I like to not cause contention in there, but I like to have a discussion to figure out where is this coming from. Obviously, I’m a huge fan of 401(k)s. But, I will say, 401(k)s are not the end-all solution. You have to have more than a 401(k) usually to retire.

Cool. Let’s get back to that. Let’s get back to 401(k)s and kind of the whole TPA relationship. The things we were going to talk about today were the top three, and you’ve prepared for this, the top three things to look for when picking a TPA. I’m excited to hear about this from your perspective because I’ve talked a lot about this. I’ve talked about how I’ve picked some of my partners and it’s always kind of changing. And I’ve been very new to meet The Ryding Company. I’ve been very impressed with your team, the level of expertise you guys have, and the processes. I’m excited. So kick it off. What’s the first of the three that you would look for when you pick a TPA?

COLETON: When I was trying to think of the three things I wanted to share, I wanted to think outside the box a little bit. Things that you wouldn’t necessarily point to just right off the bat. So some of those would have been: how long we’ve been in the industry. Well, you know, being in the industry since 1974 for us. There’s a lot of changes that have taken place with that, so longevity is not necessarily the best to pick.

I went with a slightly different route and was looking at how do we keep current. The way to do that is my number one is looking for designations. As you’re familiar with, there are a couple different regulating bodies that put credentials together. Similar to financial advisors where you have to have continuing education requirements. That’s what these two bodies require. When you see designations, you know that in order to keep them current, these people have to keep their information current which is important in this ever changing space. That’s the number one reason.

JAKE: So tell me which designations because I don’t think most advisors what designations you have. I mean, we see all those letters after your name, right. I have an AIF and I love that because I’m part of the community of FI360 and there’s continuing education. And it’s kind of taught by our peers. But tell me more about yours because you’re a QKA, right? I don’t even know that that stands for. That’s how I know it’s qualified.

COLETON: Great question. So QKA, that is the most basic which is appropriate for somebody who’s been in the industry for a couple years. It’s called a Qualified 401(k) Administrator. That requires just a couple of exams. They usually have two to three years of experience. It just goes on up based on the different tests. So you can see a QKC which is brand new. And they kind of go qualified administrator then consultant, administrator, consultant. Consultant is always the of the two levels, so be on the lookout for that.

JAKE: Yeah, it’s fascinating. I think that’s important. I like that point because the on-going effort to keep the continuing education. It’s a real key piece to that. I’ve never had a client ask me like do you have this or ever come up in an actual sales scenario. But it does keep things relevant, so I like that point. That’s a great one.

COLETON: Yeah, thank you. The number two, this one is also a little bit challenging to see and would come out when just conversing with sales reps or someone else at the company like myself. And that is the investment in the people. And this can be a little bit challenging to see as well, but in the TPA space, like the advisor space, we’re looking to have long-term relationships with our clients.

When I think of investments into the employees and the people of that company, I’d like to see people that have been there a long time. People who have been growing with the company. And it’s just people who love talking about it. So, I mean, hopefully you can tell in only three years for me, you know, I love working for this my company. I think they do a great job of that. So that would be number two, investment in their people.

JAKE: Yeah, I agree with that. High turnover can lead to some tough conversations with your clients. Obviously, I pivot to the point where I want to be the hub, right. So if there’s a problem, the clients come to me and then I’ll deal with the TPA. But there are certain things where there’s going to be some interaction. If that’s a different person every time, that’s tough. So I do like that point – keep investing in your people which in turn goes back to number one. Your people should be continually educating themselves and one thing they can do is help them get accreditations. Those are two great ones. Awesome.

Alright. Number three, what do you got?

COLETON: Number three is, quite simply, do you like working with them? Long-term relationships, you’ve got to have people that you like to work with and that you trust. And that can look very different even within each organization.

For instance, some clients prefer email correspondence or phone call correspondences. Others like to do most of their business through the advisor or the CPA. And I think it’s important for us as TPAs to be adaptable to the different needs of our clients, meet them where they’re at, and communicate in ways that matter to them. So that’s really important.

We’re pretty intentional with the way that we bring on new clients. Starting with the sales team and then transferring them to my department. And that’s really where we get to think about who in our company would be a great fit for this particular client based on their experience, based on their needs. You know, when we get takeover plans, it’s because something went wrong at the other company. Usually clients are really willing to share that with us and we can make mental notes and then make sure that we’re addressing those concerns for them at the get go.

JAKE: I like that. That’s a really good point looking at the long-term relationship. What’s fascinating about the TPA and advisor role is you’re both paid by the client, yet you have to support each other and if there’s not trust between those two parties, it’s going to be a tough relationship. That’s what I’ve found, like you have to support and not throw each other under the bus. I’ve seen that happen a lot of times. And sometimes the TPA will drop the ball. Probably advisors, we drop the ball quite a bit more, I would guess, just because most advisors are out selling. So when you actually get a plan, I think a lot of us get distracted by more opportunities. So we rely heavily on the TPA to keep everything in order and kind of put a lot of trust that they are doing that; however, it’s a team effort. It really has to be.

Those are all three solid. I love them.

COLETON: Yeah, you know, I love what you said about sometimes different groups drop the ball. But, ultimately, in the client’s eyes, we are part of their team, part of their team of trusted advisors. You know, we love to have communication outside of the client with advisors and CPAs to get on the same page and then present a solid case for our clients together

JAKE: Yeah, no, that’s so true. And I was kind of thinking about this whole TPA relationship and obviously there’s a huge bonus when you, as an advisor, have a good TPA that’s on your side. And depending which niche you’re in, if you’re going deep into cash balance plans like I do, I’m very heavily involved with TPAs, very few plans do I ever do bundled.

How does it, I mean from a recordkeeper’s perspective, I know there’s a lot of wholesalers that listen in from the record keeping side. They’re kind of in this weird camp where sometimes they have bundled plans. Sometimes they want to work with TPAs and I see some of them partner up together. And there’s been the new thing here in Utah where they have you stop by a pizza place and you take a pizza home to your family. I mean, they’re trying to just keep in touch. I mean, that hasn’t happen since Covid hit, but that was pre-Covid.

I’m curious your thoughts on how 401(k) recordkeeper wholesalers can bring more value to a TPA and vice versa? How can we make that relationship stronger? In the end, obviously, the end result is to win more business and all three of us have to work together, the recordkeeper, TPA, and the advisor. How can we better make those connections? What advice do you have for wholesalers on the recordkeeping side

COLETON: Yeah, so you know, similar to point number three about liking the people that you work with, it’s really building relationships with a couple key contacts at the TPA. So like you mentioned, a lot of these recordkeepers are doing both bundled and unbundled. They don’t necessarily care if their plans are going between those two because they get to keep the business.

But from our standpoint, we’ve got our TPA sandbox. We want to play well with advisors, CPAs, and recordkeepers. Just keeping those channels of communication open and especially letting us do what we do well and that’s plan compliance and testing. Deferring clients to us as often as they can because that’s our specialty.

JAKE: One thing I would love to see is if you and I could get together, and I actually have some of this with some of the partners I work with, that I’ve known for my whole 401(k) career which is the last six years where I’ve only done 401(k)s. We are so close in relationship that we’re kind of texting each other and we almost have this little group chat going all the time when something pops up. We kind of all put our heads together and the first thing we are thinking of is what’s best for this client. It never comes in selfishly like someone’s like well just I’ll help you if you bring it here. Those are the best partners, I feel like, where they have to be willing to give and, unfortunately, TPAs have to give quite a bit up front for free, a lot of times, to win that business. The more they do that the more I think you guilt, it’s a bad way to term it, and look at it. But, in a way, I feel as an advisor like I got to get this plan to this TPA because I had them do all this work for me. I’m very careful about that.

So how can we better get those conversations going? I mean, do you, as far as you’re in sales and in social media and those kind of connections with all the different parties involved. How do you approach that, like do you have a certain area and you know these advisors are specialists and do you ever talk to other recordkeeper wholesalers about that same advisor? Does that ever come up?

COLETON: You know, we try to keep advisor contact or communication separate.

JAKE: You want to stay neutral?

 

COLETON: Our advisor partners and CPAs, you know, those are the big referral sources us. They’re the first contact with the client. They have a lot of different opportunities for different recordkeepers because financial advisors, generally speaking, are located in a geographic area whereas recordkeepers and TPAs may not be. And so, for that reason, we try to keep as open as possible.

 

JAKE: No, that makes sense because you kind of, I would say a lot of recordkeeper wholesalers, unfortunately, are just trying to get their deal done with them, right? So a lot of times, that’s a different mentality that you have and the advisor or CPA might have. I can see that.

That’s a good feedback. I mean, honestly, that’s why I want to get to the bottom of it because I think there’s a ton of wholesalers that they can’t comment on LinkedIn. They can’t do certain marketing, so they’re trying to figure out with Covid what can they do. And I think they need to take more of a TPA-mindset where they got to just help. They’ve got to get in and help. When they see a scenario that could help somebody, share it. Obviously, keep it private, whatever the names are. But there’s a lot of things that they see and learn that could help advisors and TPAs all across the country if they would just share it. But they’re so locked down because they want that deal and they don’t want anyone to steal it. So we want to change that mentality.

 

COLETON: You make a great point because with the sharing of that information, especially with what’s important to clients. They know the different TPAs that kind of specialize in different plans or like you mentioned Cash Balance plans specifically. So what are those types of clients and plan sponsors looking for? How can we increase our value to those clients? And just kind of share that information, so together, we’re making a better end result for the client whether they stick with us or go elsewhere.

 

JAKE: Yeah, no, I like that. One other thing. I know, because we have a couple more minutes. You probably saw I posted some results from an article I saw about who sold the most plans as a recordkeeper in 2019. I just posted out there and threw the question out why is payroll at the top? Like I was just curious, Paychex sold more than double what ADP sold. It started a big conversation. It was like a very viral post. I was really shocked. I think I’m at like twenty-five thousand views and like tons of comments. And I didn’t approach it negatively. Like I don’t like to come at this like well payroll sucks. Why would you get your 401(k) from Paychexs? Like I don’t have that mindset because I think that there’s certain scenarios where it could be a good thing. There’s a lot of great integration there.

But, I guess, what I’m trying to get to the bottom of is, from a TPA’s perspective, what are your thoughts on payroll integration? Obviously that’s a big part of your world is getting that right, detailed information and data at the end of the year. What are your thoughts about that? Where do you think it’s going? What can advisors do better to avoid issues that TPAs have to clean up at the end of the year?

 

COLETON: You know, payroll integration is a double-edged sword. On the one hand, the quality of our work and the timeliness that we can turn around that quality work is heavily correlated to the quality of the data. A lot of people who are providing us, whether they work in HR or are business owner’s, that’s not their specialty. There’s a lot lost in translation about what we need to really get the process started each year. And that is almost completely avoided with payroll integration. We can, as the TPA, get that information directly from the payroll provider. Maybe ask a couple questions. But it’s severely cutting down the back and forth that we experience on our end.

You know, I think it’s great ultimately thinking on the client’s end about what makes the job easier for them. I don’t want to get rid of it all together. I think that there is certainly a balance there.

 

JAKE: Do you think it goes back to training an actual business owner or HR or payroll person. I think that’s where there’s a lot of lacking effort. There is very little told to them about what has to happen. It’s kind of like this is how you upload the file. This is the process. Not like what does this file really to be to make sure that it happens. The problem is that file is changing every two weeks. Like the business is changing. People are hired, fired. So how do we fix that? Like I don’t know a good solution other than just more training.

 

COLETON: That’s kind of been our process. We realize that with business owners who’ve got a brand new plan. You know, we’ve talked about the state-mandated retirement plans that are popping up around where business owners are getting used to providing that information. But it’s all new. We’ve gone into it with an open mind, you know, it’s going to require some investment of time. Probably a lot of time on the phone and a lot of patience. And, you know, that’s something we never tell our clients stop asking questions. We want to develop that confidence in them where they are willing to ask even what seems like a simple question. Or a question that maybe everybody asks. Those, you know, we talked about the challenging questions, but we also like the easy ones as well where we know the answer and we can be confident when we’re providing those on the spot. I think right now education is certainly a great tool that we use to help our clients and certainly avoid more frustration. It can get frustrating, you know, just miscommunication or going back and forth and not understanding what we need.

 

JAKE: Yeah, there’s a lot of blaming. If there’s not a good foundation set from the start, there can be some finger point like well you didn’t tell me that. We hired you to do the 401(k) and you didn’t tell me that by the employer and it goes down the wrong hole. So I’m always very, I put a lot of attention on that, especially with a new client on a start-up plan for, you know, definitely put a lot of effort on that. That’s where the most problems happen. I mean, that’s where 401(k)s go the wrong way. Having a good TPA that’s willing to train and educate and help that person upload the right information from the very beginning is so valuable. That’s true value. That’s worth every penny. That’s something I think our industry has to do better.

So, advisors out there, listen up. You need to make sure that you spend some time on education whether you bring the TPA in to do it or something, but train that person who is uploading the file to know why they do it and what information is important. It leads to so many headaches if you do it wrong.

Well, thanks for answering more and more questions. Sorry, I won’t keep just firing away at you. I’m glad that you were able to spend some time today and chat about those top three. Again, those top three were: number one designations, number two invested in their people, and then builds long-term trust. I love it. You know, make sure that you have good partners. I’ve found that we have success working with national and local and having a variety of different options available. I don’t know that I would ever go as far as saying you have to have just one TPA and just stick with one. I know most TPAs want me to say that, but not every TPA is a good fit for every client.

Know your niche. Know who you’re helping. Too many advisors cast that net out saying I want to help anybody with a business. That’s going to lead to some struggles because every business is so different. So niche down and find the TPAs that fit your niche. And then be more of the physician role where you’re like hey, this is the best fit. I recommend them. Then, go with it. Keep that trust. Anything else you want to add, Coleton? Any final thoughts?

 

COLETON: That pretty much covers it. Like you said, not every TPA is the right fit for every client and we know that. But just trying to figure out, you know, doing our due diligence both with advisors and clients to really make sure that we’re going to have a successful relationship with them long-term.

 

JAKE: I love it. I love it. And for those people that are just starting out on their TPA path, maybe they’re just at the bottom of the ladder. They’re just taking the phone calls and they’re just learning everything. What would you tell them, if they’re just entering this industry and they don’t see where they are going to take it and they’re maybe frustrated or like can I stick with this long-term? What would you say to yourself if that was you in that position?

 

COLETON: I’d say embrace the aha moments. Our industry is cyclical. It takes awhile to before you really feel like you’ve settled in.

I know my first year everything was learning through a fire hose. Then the second year, I felt more confident. I felt like I knew what to expect and timing wise and that sort of thing. And then just after my third year and really feeling like I have a solid overall picture. So I’m looking to drill down deep.

But that’s what I’d say. You know, keep with it. Embrace those aha moments. With time and persistence, you’ll get there.

 

JAKE: Yeah, I love it. Yeah, confidence, it just starts to build. The more you do it and it gets really excited because you know the answer. You’re still going to get stumped, but you know a lot more of the answers that you didn’t know before. That’s great words of advice.

Thanks for taking the time, Coleton. I appreciate it. Again, if people have questions or want to contact Coleton, he’s all over LinkedIn. So I would reach out that way and ask your questions. I think he’s a great. They’ve got clients all over the country right as far as like forty-one states?

 

COLETON: Yeah, we just realized that this year actually. How many countries or how many states, excuse me, we had over forty, forty-one I think it is. So we’ve got a few not represented, but working to expand their as well.

 

JAKE: That’s great. So wherever you are, you might be able to connect with The Ryding Company. If not, you know I’m sure that they would another TPA that would be in your area.

I’ve been impressed even though they’re not the largest TPA, but the definitely have the depth of experience. Appreciate you taking the time today, Coleton. I look forward to continuing to get to know you better, to get on some plans, and start working towards helping clients. And for you advisors and wholesalers out there, get after it. Find the right TPA partners and build trust, stick with it, and don’t bounce around. You’ll find that you’ll create some really good results for your end clients which is what we are all trying to do.

All right, have a great day everybody. Thank you.