Don’t let your current recordkeeper decide who your new recordkeeper will be.
Don’t let your current recordkeeper decide who your new recordkeeper will be. There has been considerable consolidation among retirement plan recordkeepers over the past few years. The retirement plan business of Prudential Financial and MassMutual were recently purchased by Empower. Principal acquired Wells Fargo’s retirement plan recordkeeping and trust business. PNC Bank sold their book of retirement plan clients to Newport Group, who in turn recently announced that they (Newport) will merge into Ascensus. Ascensus themselves has acquired over 30 third party administrators over the past few years. Voya is rumored to be buying Alight. It’s hard to keep track without a score card. Yet, plan sponsors and retirement plan advisors must keep track! The objective of the acquirer of course is to pick up several hundred or thousands of new plan clients from the exiting recordkeeper. Post-acquisition, sponsors will likely have to transition to the new recordkeeper’s systems. There will most assuredly be a new service agreement, new contacts, perhaps a new fee schedule and undoubtedly new (or missing!) processes, procedures, features and benefits. Despite this potential turmoil, many sponsors and advisors simply go with the flow and stand by while the plan transitions. This is unwise at best and negligent at worst.