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Life Health > Running Your Business > Selling

Your Client’s Next Successful Retirement Plan Transition

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What You Need to Know

  • A recordkeeper may determine whether a plan transition is smooth or rough.
  • One early step should be setting up a good payroll process.
  • A dedicated data specialist can make sure the sponsor's payroll data feed is set up correctly.

At the onset of any long-term relationship, there is a first impression. For those of us in the retirement planning industry, those first impressions are often made and crystalized in transitions and onboarding with a new plan recordkeeper.

Working together in lockstep as advisor, TPA, plan sponsor and recordkeeper, there are many roles at the table when it’s time to make a change in providers. But for the advisor, one’s reputation hinges on the success of a smooth transition process. For this reason, transitions can be challenging.

That is why the experience should be seamless, coordinated and managed with a high degree of detail. You’ll want a recordkeeper with a proven track record of partnership, clear communication and dedicated experts and specialists supporting you. A recordkeeper should also reflect well on the advisor and TPA during and after the transition.

According to the 2021 PlanSponsor Plan Benchmarking Report, 58% of plan sponsors surveyed reported that their organization has been using its defined contribution plan recordkeeper for more than seven years. (Another 12.3% said it has been more than five years but less than seven). So, when a transition does take place, it is likely to solve some sort of problem or to improve the plan sponsor’s experience, quality of service or level of support.

Transitions may also be necessary due to industry consolidation trends in which the numbers of retirement plan recordkeepers continue to shrink.

The needs or events that necessitate a transition can vary, but the fact is changing providers takes a dedicated and detailed transition team, and creating a good team is worth the effort because, when done correctly, a good team can save a lot of time and money in the long run.

The Early Stages

Because you, as the advisor, often drive the selection process of a number of vendor partners, you are generally either directly assuming responsibility of selecting or influencing the choice of the recordkeeper.

In essence, you put your reputation on the line. When the recordkeeper fails to manage the transition successfully, there can be a number of unnecessary issues. In a transition, it’s important to work with a partner who helps you think about all of the places where things can go wrong.

The impact of a bad onboarding process or transition can create ripple effects that erode trust and damage relationships. Because the onboarding experience happens so infrequently, it’s critical to have the right expertise on the team to define roles and responsibilities, ensure communication is clear and to set and manage expectations effectively for everyone involved.


Setting the tone in the beginning of any long-term relationship begins with good communication.

It’s important to set the right expectations and eliminate surprises in the new recordkeeper selection process, so that plan sponsors fully understand and are clear about what they are buying. And, when the advisor and wholesaler work well together to craft the right solution and set expectations correctly, the opportunity for a smooth transition process increases significantly.

In short, making sure that all parties involved in the transition have the information they want, in the way or format they need it, can be the key to success for a successful transition.

A good transition team takes the time to guide a plan sponsor through the conversion process, emphasizing the importance of setting up a good payroll process in the beginning to make the long-term administration less of a burden for the plan sponsor.

Roles and Needs

There are a lot of different stakeholders to consider in a transition: the advisor, third-party administrator (TPA), recordkeeper, plan sponsor and plan participants.

To have a really great experience, the advisor needs to coordinate and have strong partnership with every one of those stakeholders.

The TPA needs a strong partner in pre-planning, pre-coordination, communication sequencing and establishing clarification of roles and responsibilities to ensure they’re getting a seamless experience. For these reasons, the recordkeeper and TPA must be on the same page, and coordinate with one another in advance of meeting with the plan sponsor.

Proactively managing the plan participant experience is important because change can be difficult, especially when it’s related to an individual’s money. Participants should be well-informed, receive the notifications they require, and feel comfortable with the change.

A Single Point of Contact

For the recordkeeper’s part, a dedicated implementation manager (or transition manager) is that single point of contact whose job it is to coordinate with the advisor and all of the stakeholders, managing the setup right from the beginning.

If a recordkeeper doesn’t provide strong onboarding experience, the process won’t run smoothly.

For example, at The Standard, a dedicated data specialist’s sole responsibility is to ensure that the plan sponsor’s payroll data feed is accurate and set up correctly and painlessly. You want assurance that a recordkeeper’s platform integrates with your client’s payroll provider and can scale with the plan, so that you won’t have to repeat the transition down the road.

Having that dedicated data specialist to manage this aspect of the process is an advantage and should be one of the first questions an advisor asks for when considering a new recordkeeper.


Finally, while pressure to transition quickly is common, advisors want efficiency that doesn’t forgo a quality experience for their clients. As the saying goes, “an ounce of prevention is worth a pound of cure.

Partner with a recordkeeper that will manage a transition timeline that fits all stakeholders’ schedules and will invest in the time to deliver a good outcome. Ensuring the process is not rushed can make for a better experience and avoid errors.

The onboarding and transition process can be daunting for plan sponsors, plan participants and advisors, but, with the right partners at the table, it doesn’t have to be. Being able to recommend a solid recordkeeper can have long-term benefits that live beyond the transition experience.

Joel MeeJoel Mee is senior director of retirement plan sales at The Standard and a registered representative of StanCorp Equities. He holds the Certified Pension Consultant, Qualified Plan Financial Consultant, Qualified Pension Administrator and Qualified 401(k) Administrator professional designations.


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