Vestwell today announced two major Third Party Administrator product launches the company says will enable 401(k) outside service providers to vastly scale their client business.
The New York-based small business retirement plan provider and individual savings platform is launching a TPA partner product, Vestwell Flex, and a TPA portal. Vestwell Flex provides small businesses and retirement plan advisors with what the company calls “an exceptional recordkeeping product that combines the ease of the Vestwell platform with the seamless service of industry-leading TPA partners.” In tandem with Flex, the portal allows TPAs to efficiently scale their practices in the small and mid-size 401(k) retirement plan market.
“Vestwell recently piloted two new TPA programs to meet the unparalleled demands of administrators and retirement plan advisors. Administrators, frustrated with operational inefficiencies that prevented growth, needed a modern solution. We also saw demand from retirement plan advisors to use Vestwell as a fully unbundled platform, which led us to launch Vestwell Flex,” said Richard Tatum, President of Retirement Services at Vestwell.
“TPAs are a critical part of the retirement industry, helping service businesses and savers. But, often legacy technology holds back the level of engagement possible,” Tatum added. “These new solutions allow TPAs to expand growth, engagement, and service at a rapid scale.”
TPAs are critical for small businesses as they often need hands-on support and bespoke retirement plan designs. As a result, nearly 50% of small plan retirement plans below $10 million in assets use an outside TPA. However, for many small businesses and financial advisors, Vestwell says the process to find and vet a TPA partner can be time-consuming and the recordkeeping systems that work well with TPAs can be outdated, clunky, and maintain significant proprietary fund requirements.
Vestwell Flex streamlines the process by bundling pricing and agreements while unbundling TPA services, which are provided by industry leaders including Economic Group Pension Services (EGPS), FuturePlan, MAP Retirement, and TRA. These partners provide advisors with hands-on service for complex designs and servicing needs to meet the demands of their small business clients. The pilot program saw rapid adoption from advisors utilizing Vestwell Flex, which Vestwell says has significantly increased their ability to scale their businesses through the styles of plans they offer.
Under Vestwell Flex, Vestwell provides saver-level administration services including eligibility calculations, distributions, loan approvals, notice, and electronic disclosure delivery. TPA partners handle plan design and consultation, as well as provide a streamlined 5500 sign-off process. Advisors and their small business clients select from a set of TPAs based on their needs.
“As one of Vestwell’s preferred TPA partners, we’re pleased to be part of this new and creative product solution,” said Kasey Price, President of FuturePlan. “Together, we’re providing advisors with a time-saving solution that allows them the opportunity to scale their practice—and meet their clients’ evolving business needs.”
Vestwell’s TPA Portal supports plan design and setup, as well as key insights needed to monitor and continue to service a plan throughout its lifecycle. Vestwell’s TPA partners benefit from joining the portal because the modern platform provides a significant opportunity to drive scale and distribution. The portal also provides an enhanced pathway for Vestwell to drive business to its TPA partnerships.
SEE ALSO:
• Vestwell CEO Aaron Schumm on Who Owns the Participant and What’s Next for Recordkeeping
• Vestwell to Power Colorado-New Mexico Auto-IRA Program
• Ubiquity Unveils Streamlined Recordkeeping Solo 401k
Veteran financial services industry journalist Brian Anderson joined 401(k) Specialist as Managing Editor in January 2019. He has led editorial content for a variety of well-known properties including Insurance Forums, Life Insurance Selling, National Underwriter Life & Health, and Senior Market Advisor. He has always maintained a focus on providing readers with timely, useful information intended to help them build their business.
