I sell some stuff on eBay. I\u2019m selling collectibles I no longer want for collectibles I do want (vintage graded sports cards). I set a starting bid and a buy it now price and occasionally I\u2019ll get the eBay member who\u2019ll ask if I\u2019ll sell the product for less than my starting bid. The answer is always no because it\u2019s less than my starting bid and if I wanted to sell the item for $5 less, I would have sold it for $5 less.<\/p>\n\n\n\n
The point here is that if you\u2019re the gatekeeper for a plan sponsor if you\u2019re a plan provider, I don\u2019t think it\u2019s right to chisel other plan providers. I\u2019ve been in this business for 19 years and I\u2019ve never asked a plan provider (especially a third-party administrator (TPA)) to take less than what they\u2019ve quoted. Why? I treat people the same way I wanted to be treated and I don\u2019t want people to do that to me especially when a TPA friend of mine consistently tells me that I charge too little. Is saving the plan sponsor an extra $250 going to help the client? Honestly, I think it\u2019s going to tick off-plan providers more than it will get your clients happy.<\/p>\n\n\n\n
People may think it\u2019s blasphemy that I suggest that you should save clients money, but getting competitive bids from other plan providers is far better than just trying to chisel plan providers you want to work with. Margins in this business are getting lower and lower and plan providers have set their fees for a reason. There are some great TPAs out there who charge a $10,000 minimum. Rather than trying to undercut their entire fee schedule, I\u2019ll find a TPA that will charge less for a smaller plan. This retirement plan business is all about relationships and the last thing you want to do is develop a relationship among other plan providers that you care less about quality of service and more about squeezing plan providers to lower their schedule of fees.<\/p>\n\n\n\n
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