T. Rowe unloading duties on FIS

Ary Rosenbaum

Ary Rosenbaum - The Rosenbaum Law Firm P.C.

T. Rowe Price has announced plans to transfer responsibility for its retirement technology development and core operations to FIS National Information Services.

T. Rowe Price said it was expanding its 30-year relationship with FIS, leveraging FIS’ scale and extensive experience in retirement technology and operations while focusing on its own strengths in investment management and client service to “grow its defined contribution business in a scalable and efficient manner.” In English, that means T. Rowe is scaling back on the back end of their recordkeeping business.

T. Rowe Price already uses FIS’s recordkeeping platform, so that means that there will be no conversion or transition for any clients. However, some 800 T. Rowe employees (about 10% of the company’s workforce) are being offered the same roles within FIS that they have today, effective Aug. 1, 2021—at the same T. Rowe Price offices in Owings Mills, MD, and Colorado Springs, CO where they work now.

Plan sponsors will continue to be served by their same client service teams and T. Rowe will retain accountability for all recordkeeping services.

This is similar to what Vanguard has done and I assume that many of these large providers will do as well. Unloading responsibilities and expenses that aren’t exactly the most profitable part of the business makes sense. However, what does this do for FIS? I use FIS for plan documents and I know so many third-party administrators (TPAs) that use FIS software for recordkeeping. Plan providers are a paranoid bunch and will FIS lose customers because they’re essentially in competition with the TPAs that use their software? Time will tell, but I think there will be plan providers that will be extremely cautious about this move.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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Ary Rosenbaum

The Rosenbaum Law Firm P.C. on:

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