The third-party retirement plan administration (TPA) industry has been growing steadily for years. Today, there are an estimated 7,000 TPAs in the United States, managing over $5 trillion in assets for more than 20 million American workers and retirees.
However, running a successful TPA business is not without its challenges. In this article, we will explore the five biggest difficulties of running a successful TPA business.
As a TPA, you are legally responsible for the prudent management of your clients' retirement plan assets. This fiduciary responsibility includes ensuring that the plan is operated in compliance with the law and that the plan's investments are made in the best interests of the participants.
This responsibility can be daunting, but there are steps you can take to mitigate the risks. One way to do this is to use investment vehicles that are designed to protect the assets of the plan and its participants, such as stable value funds.
The TPA industry is highly competitive, and it can be difficult to stand out from the crowd. One way to differentiate your business is to offer value-added services, such as financial planning and investment advice, to your clients.
Another challenge of running a successful TPA business is the amount of paperwork involved. From plan documents and participant statements to government filings and tax forms, TPAs have their hands full.
One way to reduce the paperwork burden is to use electronic document management software, such as pensionpro.com. This software makes it easy to store and manage all of your documents in one place, making it easier to find the information you need when you need it.
The TPA industry is highly regulated, and compliance can be a challenge. From the Department of Labor to the IRS, there are a number of agencies that have a say in how your business must operate.
One way to stay compliant is to use a software solution that is designed specifically for the TPA industry, such as PensionPro. This software helps TPAs manage their clients' retirement plans and stay compliant with the ever-changing regulatory landscape.
One of the biggest challenges of running a successful TPA business is the amount of manual labor involved. From onboarding new clients, filing brokerage statements, pulling record-keeper reports, processing contributions to preparing for and conducting audits, TPAs have their hands full.
Stax.ai is a workflow automation software for TPAs that can save them the cost of potentially multiple full time employees. Stax.ai integrates directly with PensionPro, the most popular CRM in the industry, making it easy for TPAs to automate their workflow and get more done in less time.
If you're looking for a way to automate your workflow and save time and money, click here to schedule a free consultation. We'll be happy to schedule a consultation to discuss your needs and how our software can help.