The Retirement Plan Landscape is Becoming Increasingly Challenging for Small Recordkeepers. Is it Time to Consider Outsourcing?
August 5, 2021

Dynamics within the retirement plan landscape are shifting: plan sponsors and participants are demanding new levels of service, technology and fiduciary oversight, while technology advancements, cybersecurity threats and investment menu changes place a larger burden on small recordkeepers. For institutional plans, profit-margins are becoming increasingly slim and these providers are not well-positioned to navigate the ongoing changes.

Aligning with a quality recordkeeper can provide real value for plan sponsors and participants. In many cases, this means outsourcing some or all of the administrative and operational components to a third party.

Micah Disalvo

Written by Micah DiSalvo, Chief Revenue Officer

The Shift Toward Outsourcing

The demand for outsourcing among retirement plan administrators can be viewed through two unique lenses:

Managing ever-evolving technology needs. Technology adds true value and drives real efficiencies — but it has to be utilized correctly. The idea of technology is quite general by definition, covering the user interface and experience, cybersecurity elements, and the entire internal and client-facing technology stack. For most recordkeepers, the technology demands are vast and varied, meaning:

  • The available options and updates outpace what the provider is capable of implementing;
  • The security infrastructure necessary to protect against cyberthreats is a continuously evolving target; and
  • The software upgrade requirements are cost prohibitive.

Talent acquisition is increasingly difficult and costly. For most providers, the current business model spans disciplines, with recordkeeping being just one component of the larger service offering. This makes it difficult for those in the retirement arm to truly specialize in the business.

Simultaneously, participant demand for dedicated and specialized support creates staffing challenges and hampers the provider’s ability to scale growth without a significant talent investment. As participants want more from their provider in terms of time, services and solutions, staffing quickly becomes an issue.

    The American Trust Solution

    American Trust provides an outsourcing solution that keeps the retirement plan provider’s brand at the forefront, while providing the technology, administration and operational aspects of the recordkeeping process. Our team is composed of retirement specialists and we have invested in the industry’s best technology and solutions to benefit our partners. We act as a long-term partner, providing efficiency and engagement. The provider maintains the brand, relationship and delivers strong participant outcomes and we offer the backend infrastructure to deliver an efficient solution. Our focus on recordkeeping allows our institutional and plan sponsor partners to emphasize their core competencies and advance their competitive advantage.

    Our team will be publishing a white paper, featuring insights on the common pain points that institutional recordkeepers experience in managing their retirement book of business and why outsourcing the heavy lifting might be the most beneficial and profitable solution. We will touch on four key challenges:

    • Conflicts within business focuses: Recordkeeping services are a business unit within a larger, multifaceted organization, creating challenges for allocating resources and budget.
    • Talent acquisition and training challenges: Strategic and targeted talent acquisition is necessary to achieving measurable growth and scale.
    • Evolving user experience demands: Participants are demanding a more dynamic experience, but the resources, technology and services for delivery are inaccessible or unprofitable.
    • Mounting cybersecurity threats: Cybersecurity issues are increasingly threatening businesses from a regulatory, legal and brand reputation perspective, and proper protection is out of reach.

    We will evaluate these challenges in-depth, offering actionable solutions and insight for our institutional partners. Check out the American Trust website for more information, or click here to have the white paper delivered right to your inbox.

    The products and services described in this document are subject to all current and future laws, regulations and service terms. These materials have been provided for discussion and marketing purposes only and are not intended to be legally binding. Actual services provided may vary based on changes in applicable laws and specified contract terms.

    American Trust is a marketing name encompassing services offered by AT Retirement Services, LLC, American Trust Company, and/or AT Insurance, LLC. The following affiliates of AT Retirement Services, LLC may provide the services noted. Trust and custody services offered through American Trust Company. Securities offered through Mid Atlantic Clearing & Settlement Corporation, member FINRA/SIPC. Advisory services offered through Mid Atlantic Financial Management, Inc., a registered investment adviser. Sub-custody and trust services offered through Mid Atlantic Trust Company, a nondepository trust company.

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