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Financial Planning

The Top 401K Providers - Proven List From a 401(k) Expert

Jul 17
10 min

This blog post is all about the top 401K providers

This 401k providers list will not disappoint! Are you a business owner trying to make sense of the 401(k) world? Tired of the “trying” part of it all? Owning a business is extremely difficult. It is very time intensive but it is also a labor of love and you want to do right by your employees.Getting your first 401(k) up and running can be downright daunting and scary. Working with an advisor like us helps but not everyone wants an advisor and that’s totally fine. Once you have a few top picks, you are likely to meet with each provider to hear their offerings and as you know, time is money. You may have had this on your to-do list for quite some time but thinking of the lengthy process to set up a 401(k) has made you put it off “until next year” once again. It really doesn’t have to be like this though. Today, I am going to share with you the top 401k providers for business owners. Listen, there are so many articles written about “top providers” by research folks, researching something and living something are two very different things. When you are narrowing down your list of 401k providers, you definitely want to make sure you have the right team behind you. Do yourself a favor and give these top 401k providers a shot!Without further ado, let’s get to it.

This blog post is all about the top 401(k) providers

401k providers


Fidelity is hands down one of the biggest names in the 401k provider game. Not only do they have a 98% client retention rate, but they also stay ahead of the curve on new offerings and features. As a 401k provider, they have been able to position themselves as a top provider by meeting their client’s demands. When your employees come to you with an issue, like the difficult reality of contributing to a 401(k) while paying down student loans, you want to be able to find a solution. Fidelity prides itself on being able to help you with that.“Innovative benefit strategies, including student debt repayment programs, can help employers boost retention, stand out in the search for top talent, and cultivate a diverse workforce” However, if I am being honest, the reason they hold the number one spot on this list is simple.They offer excellent customer service and their implementation and transition teams can handle the scope of any 401(k). Fidelity’s 401(k)’s are well designed and well-executed. You will want to make sure you have them on your list of top 401k providers when you are ready to reach out.For their small business offering, you must have over 20 employees. They are on the average end of the 401k provider fee scale.

401k providers

2. T Rowe Price

This is a really exciting 401k provider because they have one of the best reputations and rightfully so. FORTUNE® named T. Rowe Price one of the “World’s Most AdmiredCompanies” of 2019 among securities/asset management firmsAKA: They run a tight ship!Over 60% of their firm's $1.47 trillion in assets under management are retirement-related so they know how to manage money and that is important. Many 401k providers will give you a price break (discount) to go with them but it comes at a price tag. You basically have to use their own proprietary funds to be able to get that price break but sometimes their proprietary funds are not the best rated. T Rowe Price is both extremely price competitive and their funds were recently upgraded to a Gold Analyst rating by Morningstar.They do require that you work with a Third Party Administrator (TPA) because they only offer unbundled 401(k) plans.Now they offer businesses of any size a great option but they do become more competitive in the $5M and up space.If you are reading this list and your 401(k) plan balance is higher than $5M you are probably looking for a new provider, be sure to look into T Rowe Price for sure.They are average/lower end on the 401k providers fee scale.

401k providers

3. Principal

This 401k provider has a soft spot in my heart because I once worked at Principal and I got to see firsthand how great the company is. Principal Financial Group is headquartered in Des Moines, IA and they are a very solid 401k provider. They care deeply about the plan participant experience and they will truly go above and beyond to meet your needs.If you have specific requests or you want a qualified retirement expert to educate your employees, you can request education days. The startup journey for your 401(k) is in great hands at Principal even if you have a small company and you are just starting your plan. Overall, the most impressive thing to me is their willingness to invest resources in technology. They were early adopters of the “Alexa of 401(k)”s (Yes, I made that term up)Your employees will log on and be able to watch on-demand videos about the most important or most popular topics related to their 401(k). The Principal can do a bundled or unbundled 401(k) plan. You don’t require a TPA.They are on the higher end of the 401k providers fee scale.

4. Vanguard

The cool kid in town. That’s definitely what Vanguard feels like right? They are straight-up industry disruptors, they love making investing simple and easy for people and they make it look easy. I appreciate everything that Vanguard has to offer on the individual retail platform and they have definitely changed the game of low-cost passive investing.The only reason they are not higher on this 401k provider list is that they don’t focus on 401(k)’s as they also partner with Ascensus to provide 401(k)’s to the smaller businesses.Through Ascensus they offer both a bundled and unbundled option. If you are looking for a 401k provider that is an affordable option and you are not looking for all of the bells and whistles, Vanguard would probably be a good fit. Don’t expect all of the extra features in the small plan space though.They are on the lower end of the 401(k) providers fee scale.

5. Empower

Empower is a powerful 401k provider. Sorry, I had to do that. There are very few companies that are trusted by the big tech companies in Silicon Valley and Empower is one of them. You may not hear their name all the time but you can rest assured that they are a top 401k provider in my book. Empower is known to have some of the best more flexible fee structures for plan sponsors (you) and that is one of the biggest things that you care about aside from the plan being a good plan for your employees. “Our one-click enrollment process makes it quick and easy for people to start saving, minimizing the time you may otherwise spend helping them enroll. Once enrolled, our industry-recognized participant website experience is proven to drive results.”The other thing I should mention is that as a 401k provider, in 2019 it was named number one for small-sized companies 3 years in a row by PlanAdviser’s Value Survey.In my opinion, this is a direct reflection of their price flexibility to business owners/plan sponsors.Empower does not offer bundled 401(K) plans so you do need a Third Party Administrator. They are on the lower end of the 401k providers fee scale.

6. Employee Fiduciary

Employee Fiduciary is a 401k provider that I became familiar with a few years ago. They are a wonderful “budget” friendly option. What I like about the company is that they are very, very transparent with their offerings. If you are currently a 401k plan sponsor and you don’t have an advisor, I am sure you know how difficult it is to try to make sense of all the different fees. EmployeeFiduciary prides itself on helping plan sponsors find “hidden fees” that other providers are charging. Although they are not the most recognized 401k provider, they are doing something good for business owners and as a business owner myself, I appreciate it. I do like a more hands-on approach to the onboarding process but they definitely don’t try to upsell any kind of “support” or hand-holding. They can’t be great at everything though right?They do, however, offer both bundled and unbundled 401(k) plans.As expected, They are on the lower end of the 401k providers fee scale.There ya have it, folks!! That’s the list.That’s all she wrote.As always, if you have any questions or need help with any of this 401(k) stuff, we are happy to help!Reach out to us here.[author_info]Pamela Rodriguez CFP®[/author_info]

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