According to Business First of Buffalo, the decision to close the unit was disclosed in an April 18 letter which also stated that ADP Retirement Services had been tapped as a replacement provider for customers of HSBC’s Retirement Financial Services unit. HSBC said shuttering the Retirement Financial Services unit was a “strategic decision.”
In the letter, the bank said that it has an agreement to assist ADP and would be compensated for its efforts if a customer accepts the transition to the new service provider.
HSBC customers have until December 31 to find a new 401(k) service provider.
Consolidation, Change Continue
Change and consolidation in the recordkeeping industry is nothing new, of course. Just last week it was announced that BISYS’ retirement services unit would be split off (see Citi to Buy BISYS in $1.4B Deal ).
In recent months Charles Schwab Corporation bought The 401(k) Company from Nationwide Financial Services (see Industry Consolidation Continues with Schwab/401(k) Company Deal ), Great-West picked up U.S. Bank’s bundled 401(k) business (see Great-West Sweeps Up More 401(k) Business ), and First Charter Corporation last fall sold Southeastern Employee Benefits Services (SEBS), part of the Wealth Management division of First Charter Bank which provides recordkeeping and administrative functions for retirement plans (see First Charter Lets Go of Recordkeeping Unit ).
You can find a profile of ADP Retirement Services from PLANSPONSOR’s 2006 Recordkeeping Survey HERE
ADP’s listing in our 2006 Defined Contribution Services Survey is online HERE
The full 2006 Recordkeeping Survey is online HERE
The full 2006 Defined Contribution Services Survey is online HERE