TPA Benchmark

What is the biggest challenge for the mid-sized regional TPA?

Russell Hooker, EVP, Nova 401k AssociatesIndustry Leader Interview, with Russell Hooker, EVP Nova 401k Associates

Dawn Hynes Question:

Let’s talk for a moment about some other challenges.  What do you see coming upon on the end of the year as the biggest challenge for the midsize regional TPA out there?

Russell Hooker Answer:

I think it’s the impact of the CPI on our business right now.  Through the end of June, it’s 5.4%.  That’s the biggest increase in recent history.  I was on one of your webinars not too long ago where we had a TPA who felt some TPAs were overpaying for employees, that everyone is so desperate for talent and so we may be overpaying for some folks.

In the face of the CPI increasing at the rate it is, which puts pressure on wages along with the downward pressure we all have on fees.  There’s not a whole lot of appetite for any of us from the record keeping side to the advisor side, it’s never can you build a new service and charge more for it, but can you do more for less.

So, I think this added wage pressure is going to be interesting.  I think if you’re small firm where it may be a little more family-oriented, maybe those relationships you have with your employees will overcome that but I think with the larger firms, there’s wage pressure and we have to balance that with our ability to raise fees to cover those costs.

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