In the world of record keepers, Ascensus LLC's third-party administration business is quick to liken itself to Switzerland. It's neutral, working with some 30 record-keeping firms, said Jerry Bramlett, head of FuturePlan by Ascensus, the company's growing TPA business.
It's a message that FuturePlan is driving home as Ascensus looks to acquire TPAs and build a national firm that will serve the administration needs of retirement plan sponsors locally. Proximity matters when it comes to providing personalized service, he said.
Assuring TPAs that the financial advisers to their plan sponsor clients will call the shots regarding the record keeper they want to work with is crucial, Mr. Bramlett said. "The adviser is the primary partner that we have in going to market," he said. "We think that it's very important that the advisers understand from us that we have no bias toward Ascensus record keeping or toward any record keeper."
In fact, of the 44,000 plans that FuturePlan serves as third-party administrator, less than 5% are with Ascensus, according to Mr. Bramlett.
"It's all about adviser choice," he said. "We want to make it crystal clear that we're very much focused on utilizing whichever record keeper the adviser would like to use."
That pitch has been central to Ascensus' aggressive acquisition strategy, allowing it to acquire TPA firms that might otherwise have been reluctant to disrupt adviser relationships with their record keepers. Over the past two years, the firm has snapped up more than two dozen TPAs throughout the country, including most recently United Retirement Plan Consultants, a large Dublin, Ohio-based firm that the company acquired in June.
"We're building a truly national TPA," Mr. Bramlett said, explaining that Ascensus has the technology, cybersecurity and economies of scale to help FuturePlan do so.
Indeed, the TPA market, which is made up of thousands of small TPA providers, is ripe for consolidation, industry observers said. As plan sponsors and participants have raised their expectations of service providers, small firms haven't been able to keep up with higher compliance, regulatory and client-service demands, said Dennis Gallant, senior analyst at research and consulting firm Aite Group LLC in Boston. "It's a scale game," he said.
What's more, with greater fiduciary demands, many firms are looking to get out of the business. "It's going to be a much more stringent, fiduciary-oriented marketplace, so there are a lot of firms saying, 'Do we have the resources to compete?'" Mr. Gallant said.