Case Study: ESOP Practice Assessment

Enterprise Iron Financial Industry Solutions, Inc.


In addition to servicing corporate and tax-exempt Defined Contribution plans, our Client also services ESOPs.

ESOP administration is a niche market and not all RKs support ESOP administration in-house. Some partner with an ESOP provider to make this service available to clients.

The pandemic brought many business challenges to the retirement industry, including a tight labor market. A tight labor market plus niche market creates unique business challenges.

Coming off the heels of the pandemic, our Client felt it was an opportune time to do an assessment of their ESOP practice to determine if it still made sense to continue to service ESOPs internally, outsource to a preferred partner, or sell this block of business.

Enterprise Iron was engaged to conduct an independent and unbiased assessment of their ESOP practice including:

•  Product / Practice Assessment
•  Competitive Evaluation (top providers in the space)
•  Book of Business Valuation
•  Cost Benefit Analysis of Insourcing vs. Outsourcing

To best position our Client for success, our Assessment was conducted through the lens of three (3) distinct areas of focus:

•  Business Focus – Does ESOP administration align with the firm’s growth strategy?
•  Administration Focus – Can the firm fulfill all the necessary requirements to administer ESOPs?
•  Competitive Focus – Does the firm offer an at “par” or “above par” service offering and is the pricing model competitive?


In collaboration with the Product Organization and Associates in the ESOP practice, we took a top down, bottom-up approach.

We deployed a small team of highly-seasoned product and ESOP SMEs.

We held a kickoff session with the team to align around objectives, deliverables, and timeline.

Upon review of existing documentation, we held several Discovery Sessions with the Client team to assess the current offering and ESOP requirements to continue to provide a competitive offering in the marketplace.

Our strategic approach and deliverables included:

•  Conducting a Product Assessment inclusive of a gap analysis that could prevent the firm from competing successfully at scale in the market
•  Reviewing and analyzing current staffing model, pricing model, and cost structure to run the practice
•  Conducting an in-depth Market Scan of top ESOP providers, including interviewing potential partners, should the decision be to outsource or sell the block of business
•  Preparing an RFP (RFP analysis would be included) in the event the Client chose to outsource or sell the block of business
•  Preparing a Book of Business and Optionality Impact Assessment outlining eight (8) potential paths forward
•  Delivering a final report inclusive of findings and recommendations


Optionality is always a top priority for this Client and our final report outlined eight (8) paths forward.

Upon the in-depth analysis EI provided, our Client decided that ESOPs will remain a core competency of the firm and they would continue to service ESOPs internally vs. partner with an ESOP provider.

This will include administering:

•  Public and Private ESOPs
•  Leveraged and Non-Leveraged ESOPs
•  Start Ups and Takeover Plans
•  Standalone, KSOPs and Combo Plans (client has both an ESOP and 401(k) with the firm)

Additional findings in our report included:

•  Cross training opportunities
•  Short list of recommended Operations and reporting enhancements
•  Continued focus on a unified participant experience (web and mobile)
•  Revisiting their Pricing Methodology

Client Testimonial
“This initiative was deemed a high priority for our firm and of equal importance we were looking to have an independent and unbiased third-party conduct this Practice Assessment. We have been working with Enterprise Iron for several years, and as a trusted business partner, this body of work was once again very thorough and extremely useful for business decisioning.”