More advisors are working with third-party administrators on retirement plans for small- to mid-sized businesses, according to data from Hartford Financial in Simsbury, Conn.
The insurance and investment firm has always primarily sold retirement plans to smaller businesses through financial advisors, who would then manage the implementation and admin themselves. In fact, 10 years ago, none of the advisors running a Hartford plan for a small-business client used a TPA, which were more common at the larger firms.
However, working with TPAs has now become the norm, and 87% of the plans advisors sold this year for Hartford use a TPA for administration and implementation, up from 83% last year.
The TPA universe currently numbers around 4,000 firms, of which about half now have a relationship with the Harford. “Retirement planning is more complex than ever and the regulatory climate means you need a lot more expertise,” to run a group retirement plan, said David Potter, a spokesman for the Hartford. “As a result, more and more advisors are reaching out to TPAs.”
The Hartford managed $28.5 billion before three acquisitions in 2007, SunLife’s retirement business, which formerly belonged to MFS; and Topnoggin and the Princeton Group, both of which manage defined-benefit plans and came with proprietary technology that helped the Hartford grow its group plan business. By 2008, it had grown group plan assets to $37 billion. As of the first six months of this year, the Hardford’s group assets stand at $43.8 billion.