The arrangement differs from a number of acquisitions undertaken by BISYS in recent months, which have generally involved picking up smaller clients from a number of providers that have chosen to focus on larger segments. It also differs from a number of recent announcements by other firms because US Bank will remain trustee and named recordkeeper for the 2,700 plans.
Effectively, US Bank has hired BISYS to provide the firm with recordkeeping services for its clients. As a result of the configuration, no changes in existing service agreements will be required, while US Bank customers will benefit from the move to the BISYS platform, including Web and interactive voice response (IVR) inquiry capabilities, call center services, customized communication materials, and ongoing sales support.
For BISYS the move clearly reveals an ability, if not an interest, in moving “up market,” and for the industry perhaps yet another model for outsourcing. Today three models seem to be in play, George Evans, executive vice president of business development for BISYS Investment Services told PLANSPONSOR.com. “ There is the camp that says you can’t outsource, because the market will react badly to the decision,” he said. Evans also cited a model where a provider develops the capability to manufacture, distribute and produce the recordkeeping product in-house, and, as Evans notes, “there is the US Bank model, where you outsource the operation, while maintaining the customer relationship.” BISYS, of course, says it is comfortable with any of those configurations. BISYS already has relationships with 40 institutional clients, covering more than 15,000 company-sponsored 401(k) plans, and some 1.2 million eligible employees.
US Bank positioned the decision as an investment in its recordkeeping business. “While we focus on providing solutions, building and deepening relationships and adding value for our clients, BISYS will provide state-of-the-art technology today,” according to Diane Thormodsgard, president of US Bank Institutional Trust & Custody.
Yet, when one looks at events over the past several weeks in the recordkeeping field, it is clear that massive change is still afoot, the slumping markets have brought the usual chickens home to roost, and providers are – again – reconsidering their chosen fields of focus. In the past month the “new” Wachovia (or the old First Union) picked up some 4,100 plans and 1.3 million participants with its acquisition of PFPC’s recordkeeping and third-party servicing business (see Wachovia Brings PFPC Recordkeeping and TPA Business On Board ). Lincolnshire, Illinois-based Hewitt Associates has added some 200 clients and 1 million participant accounts to its growing book of business with the acquisition of Atlanta-based Northern Trust Retirement Consulting (NTRC) (see Hewitt Picks Up NTRC ), and payroll giant ADP agreed to form a new joint unit including the recordkeeping operations from Scudder Investments called the Benefits Services Alliance (see Scudder, ADP Join in New Recordkeeping Deal .
As for US Bank customers, they will be introduced to their new services during the third quarter, including:
- the availability of financial advice from Morningstar.
- automated account rebalancing for model portfolios.
- integrated self-directed accounts.
- a new US Bank Call Center
- enhanced online functions to help plan sponsors manage their retirement plans, including online enrollment, editing and transactional capabilities.
- enhanced, time-saving year-end services.