A 401(k) allows business owners and employees to save up to $57,000 annually through tax-free salary deferrals, matching, and profit-sharing. While all 401(k)s follow IRS rules, choosing the right provider—particularly for a solo 401(k)—is very important. We’ve reviewed more than two dozen 401(k) companies to arrive at list of the 10 best providers.
Top 401(k) Providers
Provider | Best for |
|---|---|
(Best overall) Full-service 401(k) provider | |
Owners seeking an all-online provider that includes cost-competitive funds | |
High-networth business owners seeking comprehensive financial planning | |
Owners seeking a simple plan that handles the burden of regulatory compliance | |
Businesses looking for an easy-to-use investment platform for administering their 401(k) | |
Owners seeking the widest range of low-cost mutual fund options | |
Businesses that need a payroll provider with seamless 401(k) administration | |
Owners looking for target date fund with little maintenance required | |
Investors wanting low-to-no fees on various trades | |
Small businesses looking for personalized service from dedicated account relationship managers |
Which 401k Provider Is Right For You?
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Wells Fargo: Best Overall 401(k) Provider
Wells Fargo ranks as our best 401(k) provider because it has a credible reputation, a diverse list of services, and a competitive fee structure. As a plan administrator, Wells Fargo takes care of the recordkeeping required for the 401(k). It also offers bank services, multiple types of investment and trading, and offers cash management. Additionally, clients can seek business loans and merchant services through Wells Fargo, keeping everything under one roof.
Investment Options
Wells Fargo provides a host of in-house and independent investment options for 401(k) clients, including:
- Mutual funds: Wells Fargo recommends an array of mutual funds as investment options within 401(k)s. The company offers its own mutual funds and also makes funds from other providers available to 401(k) participants.
- ETFs: 401(k) clients can also invest in Wells Fargo or third-party ETFs, which are baskets of individual securities like mutual funds that trade like stocks.
- Stocks: You can actively trade domestic and international stocks with Wells Fargo.
- Bonds: Wells Fargo also allows participants to trade individual debt issues.
- Target date funds: Wells Fargo has a line of target date funds that are designed to adjust the underlying portfolio based automatically on a targeted retirement date.
Setup & Plan Administration
With its numerous business groups, Wells Fargo is capable of handling the 401(k) from inception and implementation through long-term investment strategies. In a 401(k) plan, Wells Fargo can help with the following:
- Plan administration
- Cash management
- Payroll
- Trading platform
- Investment advice
- Proprietary investment options
Wells Fargo 401(k) Costs
The costs for a Wells Fargo 401(k) vary greatly based on the size of a plan and number of participants, investment options available as well as the specific role(s) that Wells Fargo is playing in setup and administration.
Type of Fee | Fee |
|---|---|
Plan Administration Fee | 0.25% to 2.0% annually |
Annual Fund Fee | 0% to 1.25% annually |
Custodial Fee | 0.10 to 0.50% annually |
Customer Service
Customer service is offered in a myriad of ways with Wells Fargo. It has a comprehensive online platform as well as retail banking branches around the country where clients can go for assistance. In addition, Wells Fargo has contracted with independent financial advisers throughout the country who, although not branded under Wells Fargo, can help clients navigate the company’s various offerings, get answers to questions, and start or administer a plan.
ShareBuilder 401k: Best All-online 401(k) Provider
ShareBuilder 401k sets itself apart by offering a complete online experience for those who seek it. It’s focused on offering low-cost 401(k) plans to self-employed individuals and small businesses that include the lowest-cost, best-in-class investment options available. Using ShareBuilder 401k, small business owners can set up a plan completely online for a flat fee and start investing immediately.
Investment Options
ShareBuilder 401k offers specific types of managed portfolios that include:
- Index ETFs: ShareBuilder 401k makes available to plan participants about a dozen low-cost index ETFs that have annual expense ratios of 0.39% or less.
- Model portfolios: Participants can use five different model portfolios that are comprised of mutual funds, exchange-traded funds (ETFs), real estate investment trusts (REITs), and other investments.
Setup & Plan Administration
While ShareBuilder 401k offers 401(k) plans with as few as one participant, it specializes in businesses with between six and 10 employees. This is ideal for a business that thinks it will be growing shortly. ShareBuilder 401k focuses on the following:
- Plan administration
- Investment platform
ShareBuilder 401k Costs
ShareBuilder 401k offers plans with flat fees that vary based on the type of plan you establish and the number of participants in your plan. The fewer the number of participants, the smaller the fees.
Type of Fee | Fee |
|---|---|
Plan Administration Fee | $25 to $110 monthly |
Annual Fund Fee | 0.04% to 0.39% annually |
One-time Setup Fee | $150 to $750 |
Customer Service
Even though ShareBuilder 401k is designed to get you up and running with an entirely streamlined online experience, a team of professionals is available for customer support. Service issues handled include questions about the online platform, questions about investments, and administrative issues. The team isn’t just available but also responsive.
Merrill Edge: Full-service 401(k) Provider for High-net-Worth Individuals
Merrill Edge is an online brokerage unit of Merrill Lynch and is owned by Bank of America. Merrill Lynch prefers to work with high-net-worth individuals looking at comprehensive planning, not just transactions. To have a relationship with Merrill Lynch, you typically must have at least $250,000 to invest. Because the online brokerage has fewer management requirements, smaller accounts are available to open.
Through Merrill Edge, small business owners can get access to all Bank of America services and resources, including business banking, lending, and wealth management. As a standalone unit, Merrill Edge offers clients an easy, cost-effective 401(k) option that provides ample investment options, streamlined service, and a straightforward fee structure.
Investment Options
Merrill Edge offers investors a host of investment options, many from the premium Merrill Lynch parent name, including:
- Mutual funds: Merrill typically structures 401(k)s with an array of mutual fund investment options for participants. Merrill Edge offers mutual funds from Merrill Lynch as well as other providers.
- ETFs: As with other providers, 401(k)s through Merrill Edge with brokerage options allow for investing in ETFs that trade like stocks. You can access ETFs from Merrill Lynch as well as other providers.
- Stocks: If given a brokerage option within a 401(k), participants can actively invest in individual stocks.
- Bonds: Some investors can also buy and sell individual debt issues in their 401(k)s.
- Target date funds: Merrill Edge doesn’t have its own target date funds but offers funds from Merrill Lynch and other providers designed to adjust the portfolio balance automatically as a targeted retirement date draws near.
Setup & Plan Administration
While Bank of America and Merrill Edge provided several different financial services, Merrill Edge is predominantly a discount brokerage arm and trading platform. As a 401(k) provider, Merrill handles many services seamlessly, including:
- Plan administration
- Recordkeeping
- Trading
- Account reporting
While Merrill is not a payroll provider, it does make it easy to coordinate contributions to your plan by setting up automatic contributions for employees as well as cash sweeps for employer matching and any profit sharing.
Merrill Edge 401(k) Costs
While not the cheapest 401(k) company, Merrill Edge is relatively cost-effective. Even more significantly, it is easily one of the most straightforward providers in terms of cost.
Type of Fee | Fee |
|---|---|
Setup Fee | $390 |
Administrative Fee | $90 monthly |
Investment Fiduciary Fee | 0.07% annually |
Participant Service Fee | 0.20% annually |
Account Servicing Fee | 0.25% annually |
Recordkeeping Fee | $4 monthly per participant |
Mutual Fund Expense Ratio | 0.03% to 2.0% annually |
Customer Service
While Merrill Edge is predominantly online, its parent companies have offices around the world with in-person and phone support available. Merrill Lynch offices and Bank of America branches are in most communities across the country. You can use dedicated representatives from one of these offices to resolve any issues and provide individual guidance, in addition to numerous other financial services.
Guideline: Best for 401(k) Regulatory Compliance Assistance
Guideline is one of the best 401(k) investment companies because it promises transparent pricing and simplicity, and this 401(k) provider delivers. Companies can choose from two different plans, both of which offer a full array of services—including assistance with regulatory compliance—for a flat monthly fee plus a fixed per-employee cost. Guideline simplifies the cost structure for business owners, making it less intimidating to operate a 401(k).
Investment Options
Guideline offers employees two different options for investing, so every 401(k) plan participant can find investments that suit their needs. There are two methods of investment with Guideline that include:
- Index funds: Guideline offers more than 40 index funds to choose from, including funds from low-cost providers like Vanguard. Funds in Guideline’s portfolio of investments charge a blended average of 0.06%.
- Managed portfolios: Guideline works with employees to assess risk tolerance and builds a recommended portfolio of funds well-suited to their retirement goals. There are no fees charged by Guideline for managed portfolios.
Setup & Plan Administration
Guideline offers a choice of two plans: an entry-level Startup Plan and a costlier but more robust Prime Plan. Both offer a full array of features for businesses, including:
- Assistance with regulatory compliance
- Robust account management features
Guideline 401(k) Costs
Guideline is one of the most affordable 401(k) providers, both for employers and employees. Pricing is transparent, and employers have a choice of two different plans depending on their needs.
Type of Fee | Fee |
|---|---|
Startup Plan | $39 monthly + $8 per employee |
Prime Plan | $99 monthly + $8 per employee |
Neither plan charges investment management fees or custodial fees, and both plans offer mutual funds with low expense ratios. Both plans do charge a $250 termination fee as well as fees for specialized services employees may require, including a $100 fee for employees who apply for loans and a $75 per year annual loan maintenance fee.
Customer Service
Guideline has been recognized for its first-of-a-kind software that streamlines 401(k) setup and management for businesses. It offers complete payroll integration and has live, United States-based support for plan participants via phone or chat. Starting with a free 30-minute 401(k) consultation helps your company get your plan up and running quickly. Prime plan participants also receive priority support with a dedicated account manager assigned to them.
Human Interest: Easiest to Use Low-cost 401(k) Provider
Human Interest was founded on a belief that many 401(k) companies charge excessive or hidden fees. As a disrupter to the industry, it is an investment platform that can administer your 401(k) plan and is great for small business owners willing to use an online provider for ease of use to save time and money.
Compared to other 401(k) companies, Human Interest aims to keep administrative costs down and utilizes flat administrative fees, so business owners know what to expect. While it doesn’t offer payroll services in-house, it works well with most systems and provides a core group of services very efficiently.
Investment Options
Unlike some other providers, Human Interest provides limited investment options. Still, the funds it offers are typically the most popular types of investment vehicles for retirement accounts and provide ample opportunities for participants to grow their assets.
Human Interest investment options include:
- Mutual funds: Human Interest provides 401(k) participants with an array of well-diversified mutual funds to choose from, offered by reputable companies.
- Target date funds: 401(k) participants can also invest in funds that are structured specifically for shifting debt-to-equity ratios as investors move closer to retirement. While potentially beneficial, target date funds can involve additional fees.
Setup & Plan Administration
Human Interest has a core group of services that it provides very efficiently. For other items like payroll services, it works very well with any outside providers that a small business relies on. The primary 401(k) services offered by Human Interest include:
- Plan design and administration
- Recordkeeping
- Trade processing
- Guidance on investment options
- Financial literacy courses and employee resources
Human Interest 401(k) Costs
Human Interest provides a detailed list of its fees directly on its website and is extremely cost-efficient in its offerings. Its services are offered for a flat monthly fee to help small business owners better budget their 401(k) assets.
Type of Fee | Fee |
|---|---|
Administration Fee | $120 monthly + $4 per employee |
Investment Advisory Fee | 0.50% annually |
Investment Fund Fees | 0.08% annually |
Customer Service
Human Interest is almost entirely online with no retail offices around the country for clients to get guidance, nor is there a menu of additional services that many other providers offer. Despite having limited brick-and-mortar options, each 401(k) client gets a dedicated account manager, and the company works with other types of providers to make administration seamless for business owners and employees. Human Interest even provides support for 401(k) plan participants who want to borrow against their retirement assets.
Vanguard: Best 401(k) Provider for Mutual Funds
Vanguard is the largest mutual fund company in the world, managing more than $4.5 trillion in assets. The company offers professionally managed mutual funds and ETFs that can potentially be used within a 401(k) plan, depending on the design of the plan. Vanguard is the ideal provider of mutual fund options for any 401(k).
In the 401(k) space, Vanguard’s role is confined to a pure money manager. It doesn’t do plan administration, payroll, or banking but is very highly regarded as a money manager and a great source of investment options for your 401(k) plan. Vanguard’s funds have many different focuses—domestic vs international, stocks vs bonds, aggressive vs conservative—and it offers investors a good deal of diversification at an exceedingly low cost.
Investment Options
Vanguard’s primary role in the 401(k) industry is providing well-managed investment options, including:
- Mutual funds: Vanguard offers more than 100 mutual funds that are well-managed and among the most inexpensive in the industry. They are available to 401(k) participants through most plan administrators.
- ETFs: For those employers who structure a 401(k) to include a brokerage option, Vanguard also offers a line of ETFs that are also well-diversified and low cost.
- Target date funds: Vanguard offers a wide array of funds that are designed to adjust the underlying portfolio automatically over time as a targeted retirement date draws closer. Unlike other providers that tend to layer fees for target date funds, Vanguard’s target funds are among the most cost-effective in the mutual fund industry.
Setup & Plan Administration
On its own, Vanguard is not a plan administrator. Vanguard offers relatively easy integration with banks and payroll service providers when used through an administrator platform. However, like most mutual fund companies, it still has substantial room for improvement when it comes to technology and seamless integration.
Vanguard 401(k) Costs
Vanguard’s expenses in the 401(k) space are confined solely to fund charges expressed as a percentage of the total assets invested. These fees increase as the amount invested rises and are deducted from participant accounts automatically.
Type of Fee | Fee |
|---|---|
Mutual Fund Expense Ratios | 0% to 0.25% annually |
Customer Service
Other 401(k) plans typically hold Vanguard funds through an intermediary like a plan administrator. This means that Vanguard doesn’t coordinate customer service directly. Instead, customer service typically is handled by a 401(k) administrator.
Paychex: Best Payroll Provider for Easy 401(k) Administration
Paychex is known as a payroll provider, but it is also an excellent choice as a 401(k) plan administrator. It also provides outsourced benefits solutions, business loans, and other services for small- and midsize businesses (SMBs). Paychex is a great provider for small business owners who want to outsource payroll processing to a company that can integrate seamlessly with 401(k) administrators and other providers.
Paychex is the top choice for payroll provider because of the critical recordkeeping services it provides. Most importantly, however, Paychex offers seamless integration with 401(k) third-party administrators (TPAs), making the process of plan administration much easier for small business owners.
Investment Options
As a payroll provider, Paychex does not offer any investment options. Instead, its client firms canuse any investment options available through the plan administrator they choose. This opens the door to unlimited investment choices based on the administrator chosen.
Setup & Plan Administration
Paychex is being highlighted here for the extreme ease in which it can coordinate with 401(k) plan administrators. This gives small business owners a great deal of flexibility to choose an administrator, trading platform, and investment options that are right for them. Paychex’s role in the process is confined but effective and cost-efficient. For example, it will facilitate pretax or post-tax employee contributions as well as any employer match.
Paychex 401(k) Costs
Because Paychex does not provide plan administration or investment options, its costs are confined to payroll services, should you decide to use them. Its billing structure is based on the number of employees and pay periods per year and increases with the number of employees and number of annual periods. There are additional charges for processing employee W-2s and other tax forms, and you need to contact them directly for a free quote.
Type of Fee | Fee |
|---|---|
Payroll Fee | Starting at $29 monthly + $4 per employee |
Customer Service
While Paychex is focused almost exclusively on payroll and human resources (HR) solutions, there are more than 100 offices throughout the country that small business owners can contact for assistance. The company does a great job of making it easy for business owners to work with 401(k) plan administrators to implement a plan and make contributions.
Fidelity: Best Target Date Funds Provider
Fidelity is a diversified financial services company offering mutual funds, securities brokerage, and business and personal banking, including credit cards and business loans. Fidelity is the best target date funds provider for 401(k)s because of the 13 Freedom Funds plans the company offers.
Small business owners can get access to 401(k) plan administration and recordkeeping services, a full trading platform, and investment advisory services, plus personal and business banking. Many of these services come from different business units but can all be provided by Fidelity as a full-service firm.
Investment Options
Fidelity makes an array of in-house and independent investment options available to 401(k) clients, including:
- Mutual funds: In addition to its own line of mutual funds, Fidelity also offers 401(k) participants access to funds from other providers through its trading platform.
- ETFs: If a 401(k) is established with a brokerage option, participants can trade in ETFs, both from Fidelity and other providers.
- Stocks: Employees can actively buy individual shares in companies if their plan includes a brokerage option.
- Bonds: Plan participants in certain plans can also trade in individual debt issues from companies and countries.
- Target date funds: Fidelity offers a wide array of target date funds through its Freedom Funds line, with targeted retirement dates in five-year increments ranging from 2025 to 2065. The funds adjust automatically as the targeted retirement date gets closer.
Setup & Plan Administration
As a full-service financial firm, Fidelity offers a host of different financial services. In addition to its line of mutual funds, trading platform, and banking services, Fidelity also offers a number of services specific to 401(k)s, including:
- Plan administration
- Recordkeeping
- Trading
- Account reporting
Fidelity 401(k) Costs
Type of Fee | Fee |
|---|---|
Plan Administration Fee | 1.5% to 2.0% annually |
Recordkeeping Fee | 0.40% to 1% annually |
Mutual Fund Expense Ratios | 0.30 to 1.50% annually |
Customer Service
Fidelity places a major emphasis on customer service. It has offices in a number of communities around the country, where clients can go to get individual assistance or work with a dedicated adviser for one-on-one guidance. On top of that, its phone support is some of the best in the industry.
Charles Schwab: Best 401(k) Low-to-No Fee Provider
Charles Schwab offers both a full-service 401(k) plan customized to your company and the option to add investment advisory services to an existing 401(k). Charles Schwab has both a broker-dealer and banking subsidiary, so it can provide a full range of financial services. It also offers its own proprietary mutual funds and ETFs to plan participants, along with other investment options.
With zero dollar trading fees, Charles Schwab gets our nod for the best low-to-no fee provider. This is extremely attractive for 401(k) owners who want to trade stocks or bonds in their accounts.
Investment Options
Charles Schwab provides a wide array of investment options for retirement plan customers, including:
- Mutual funds: Schwab offers thousands of mutual funds with no loads and no transaction fees. This includes more than 50 Schwab funds that target specific investment objectives.
- ETFs: With Schwab ETF OneSource, investors can find ETFs they can purchase in their 401(k) accounts without paying commission fees.
- Stocks: Business owners can include a brokerage option, so plan participants can purchase individual shares of US and international stocks.
- Fixed income investments: Schwab 401(k) plans can also provide investors with the opportunity to invest in bonds or annuities if they’d prefer conservative investments or are nearing retirement age.
Charles Schwab also provides the option for managed accounts, which enable plan participants to get personalized advice on asset allocation based on their contribution rate, age, account balance, salary, employer contribution formulas, and other relevant factors.
Setup & Plan Administration
When establishing a Schwab 401(k) plan for your business, you will get a customizable plan that is designed to meet the needs of your organization and employees. The primary 401(k) services Schwab offers include:
- Plan design and administration
- Consultation in Employee Retirement Income Security Act of 1974 (ERISA) compliance
- Plan analytics
Charles Schwab 401(k) Costs
Charles Schwab solo 401(k) costs are among the most reasonable in the industry, with no administration fees or commission fees. The only fees participants can expect to pay are the mutual fund fees.
Type of Fee | Fee |
|---|---|
Plan Administration Fee | $0 |
Commissions Fee | $0 |
Fund Fees | 0.04% to 1.0% annually |
Customer Service
Schwab offers companies a choice of communication methods, including the opportunity to obtain support in-person, via online chat, or by phone. There is also a mobile app that is easy to use and gives you access to Schwab’s massive library of webcasts, articles, and videos.
Employee Fiduciary: Best 401(k) Provider for Personalized Service
Employee Fiduciary is a 401(k) plan administrator that caters to small businesses of all sizes. Every company that signs up for a 401(k) plan with Employee Fiduciary will go through a plan design consultation to create a plan that meets the company’s goals and budget. Companies with existing 401(k) plans will also benefit from Employee Fiduciary’s plan conversion services as they move their plan over to this new provider.
Investment Options
Employee Fiduciary is one of the 401(k) companies that has a seemingly limitless number of options when it comes to mutual funds. However, the company does not offer stocks or bonds as an investment option.
Employee Fiduciary 401(k) investment options include:
- NSCC-tradable mutual funds: Choose from 377 fund families providing access to 30,000 share classes.
- Vanguard funds, index funds, and ETFs: The option to include self-directed brokerage accounts from TD Ameritrade also adds an additional level of investment flexibility to plans managed by Employee Fiduciary.
Setup & Plan Administration
Employee Fiduciary begins providing personalized service from the first day. You’ll receive plan design consultation, training, and support. The primary 401(k) services offered by Employee Fiduciary include:
- Plan design and administration
- Training and support
- Regulatory compliance assistance
- Bookkeeping and recordkeeping services
Employee Fiduciary 401(k) Costs
Transparent pricing is one of the best features of Employee Fiduciary. The 401(k) administrator offers a detailed list of its startup, annual, and ongoing fees.
Type of Fee | Fee |
|---|---|
Startup Fee | $500 |
Base Fee | $1,500 annually |
Custodial Fee | 0.08% annually |
One of the nice features of this provider is the Employee Fiduciary’s online tool to answer a few simple questions to calculate the total cost of starting and administering a 401(k) plan with this plan administrator.
Customer Service
With Employee Fiduciary, every business with a 401(k) plan is assigned a dedicated relationship manager. Many other 401(k) investment companies offer this only to companies with premium accounts. Service is available via phone through the company’s 800 number. Employee Fiduciary also offers a dedicated 401(k) help center that includes ample free educational resources, including a checklist for shopping for a 401(k) provider.
How We Evaluated the Best 401(k) Providers
Our guide reviews providers on specific criteria that we know are important to investors and business owners when establishing a new solo 401(k). We considered traditional banks, HR companies, mutual fund companies, payroll providers, and third-party administrators in the mix. We didn’t limit rankings based on cost since those with higher costs often have higher-level customer service and retirement planning opportunities.
After looking at various types of 401(k) providers, here are the criteria we used to determine the best:
- Role in the process
- Ease of integration
- Reputation
- Investment options
- Administrative costs
- Employer and employee customer service
Ultimately, there are many 401(k) options out there. Business owners should choose a provider that allows them to conduct the types of investments they desire for a reasonable price.
Alternative Options to a 401(k)
The 401(k) is not the best option for every business owner. Depending on how much you will invest and how much time you want to spend on administering the plan, you may opt for other retirement savings vehicles such as a simplified employee pension (SEP) or savings incentive match plan for employees (SIMPLE) IRA. These options can be more cost-effective for someone not looking for many bells and whistles.
SEP IRAs
The SEP IRA can be an ideal alternative if you’re self-employed or own a small business with less than three to five employees. If you make more than $75,000 per year, a SEP IRA can be especially advantageous because you can contribute up to 25% of income or $57,000 without the added expenses that a 401(k) has.
The key difference with SEP IRAs is that employers are required to fund all contributions for themselves as well as their employees. There are no employee salary deferrals or matching contributions. For businesses with more than three to five employees, this can often be more expensive than a 401(k) but, for a sole proprietor, this can be a great option.
SIMPLE IRAs
A SIMPLE IRA is literally simpler than a 401(k). It has even been called the “poor man’s 401(k)” because it offers many of the same benefits for small businesses with a few employees, without the expense of administering a 401(k).
Like a 401(k), SIMPLE IRA contributions are composed of employee deferrals and matching contributions. However, the contribution limits are lower for a SIMPLE IRA capping out at $13,500 annually with employer matching contributions following strict guidelines.
Bottom Line
Not all 401(k) providers are created to meet the demands of every type of client while some cover the most common needs. Choose a provider that makes it easy to establish and manage the account. You want to balance the cost with the investment options and advice received.
For those who need a provider that does a little more hand-holding through the process of owning a solo 401(k), check out ShareBuilder 401k. It is an experienced provider of 401(k) plans and has reasonable setup fees of $150 and monthly administrative fees of $25. ShareBuilder 401k keeps it simple so you can get back to earning.
