Financial Advisors: How to choose the right TPA

Financial advisors and third-party administrators (TPAs) are one of the most important teams in delivering an exceptional retirement plan to an employer. A TPA is the Robin to the FA’s Batman, and the two work together to provide comprehensive financial planning and investment management services to clients. In this type of arrangement, the financial advisor typically works with the client to develop a financial plan and make investment recommendations, while the TPA handles the administrative aspects of the client's investment portfolio, such as record-keeping and regulatory compliance. This partnership should help to ensure that the client receives a high level of service and expertise in both the financial planning and investment management aspects of their financial situation.

As a financial advisor, how do you know what your TPA should bring to the table and how can you best utilize their expertise? Your TPA should be responsible for a wide range of administrative tasks.

Some of those specific tasks include:

Regulatory compliance: TPAs must ensure that the investment portfolio they manage is in compliance with all relevant laws, regulations, and industry standards. This may include tasks such as conducting periodic audits and preparing and filing required reports and disclosures.

Investment management: In some cases, TPAs may be responsible for managing the investments in a client's portfolio, including making buy and sell decisions, rebalancing the portfolio, and monitoring performance.

Tax preparation and planning: TPAs may assist clients with tax-related issues related to their investment portfolio, such as preparing tax returns and providing advice on tax-efficient investment strategies.

Client communication: TPAs often act as a liaison between clients and other financial professionals, such as financial advisors and investment managers. They may be responsible for answering client questions and providing regular updates on the status of their investments.

Working with record keepers: Record keepers are responsible for maintaining accurate and up-to-date records of a client's investment portfolio, including account balances, transactions, and performance. They may also be responsible for generating regular reports for clients and regulatory bodies. TPAs should know how to work closely with them.

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So, it’s up to you as an advisor to determine which of these tasks you need your TPA to perform and where you need the most expertise.

There isn’t a one-size-fits all plan for your clients – at least not good ones. So the help of an expert TPA with vast knowledge of plan design, ERISA regulations, and business strategy will be invaluable.

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Aligning a plan with the company’s needs and goals in mind

Not only are no two businesses the same, even businesses in the same industry often have vastly different needs and goals when it comes to their retirement plans. A good TPA can step in and evaluate the needs of the business, create a relationship with the decision makers, and work to implement a plan that will run smoothly for them.

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Compliance, design, and consulting

Make sure your TPA can effectively manage the day-to-day aspects of your clients’ retirement plans. They should bring expertise on plan compliance, design and consulting that you may not have and should share that with you and with your clients directly. Administering the appropriate plan with the right knowledge is invaluable, and your clients will expect their advisor to be abreast of what is happening with their plan.

A good TPA is the key to success with your most important clients. The tasks a TPA does for you and for your client will be different, but it all makes you look great as a financial advisor.

Your TPA should ensure that your clients’ retirement plans meet legal and regulatory requirements. Although a TPA’s primary focus is plan administration, they should provide practical answers to your questions and will help you navigate the complex rules and provisions of retirement plans.

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A relationship built on trust

The relationship with a TPA consultant is crucial and will be based on trust, transparency, cooperation, and partnership. They are your primary go-to for questions regarding your clients’ plans. Having good communication is key.

The Ryding Company team prides itself on strong partnerships with its financial advisors. Let talk about how we can partner up to help your clientele!! Contact Us

This information is provided as general guidance and may be affected by changes in law or regulation. It is not intended as accounting or legal advice. If you have questions please reach out to our team.