How Financial Advisors Choose a 401(k) Company


Choosing a retirement benefit provider is a critical and at times challenging endeavor for all businesses, but it’s easier when you know what to look for. Retirement plan advisors, who work with 401(k) companies every day, can show you how to shop like a pro. 

Plan advisors typically consider the following factors when choosing a 401(k) provider to partner with.

Factor 1: Plan Features and Flexibility

Advisors look for 401(k) providers that offer a wide range of plan features and flexibility, such as investment options and plan design options. This allows them to tailor the retirement plans to the unique needs and goals of their clients, including both plan sponsors and participants.

Make sure your 401(k) provider offers safe harbor plans and a range of vesting, matching and eligibility options. Ask them if they are ready to comply with SECURE Act 2.0 regulations.

Factor 2: Cost Structure

The cost structure of the 401(k) plan is an important consideration for financial plan advisors. They assess the fees associated with the plan, such as administrative fees, investment fees, and recordkeeping fees, to ensure that the plan is cost-effective and provides value to their clients. They may also compare the costs of different 401(k) providers to ensure that their clients are getting competitive pricing.

Details are important when evaluating costs. For example, are fees charged per eligible employee or per active participant? What do base fees cover and what will be charged extra? How well does the pricing scale as the company grows? 

Factor 3: Plan Administration and Compliance

Advisors consider the ease of plan administration and compliance support offered by the 401(k) company. This includes evaluating the quality and efficiency of the company’s recordkeeping, reporting, and compliance services. Robust administrative support can help reduce the administrative burden on plan sponsors and ensure that the plan remains in compliance with applicable laws and regulations. 

Advisors look for payroll integrations, especially for the providers they recommend. Integration is a valuable benefit for both plan sponsor and advisor. Good fintech providers will offer plenty of integrations, and automate compliance, which not only reduces errors, but also finds problems early, while they can be easily addressed.

Factor 4: Investment Options and Performance

Advisors assess the investment options offered by the 401(k) company, including the quality, diversity, and performance of the investment funds. They may look for a wide range of investment options, including low-cost index funds and actively managed funds, to provide diversified investment choices for plan participants.

401GO offers a substantial investment lineup, with a diverse selection of low-cost funds. We also allow associated financial advisor partners to create custom fund lineups and models, if they choose to do so.

Factor 5: Technology and Tools

Advisors consider the technology and tools provided by the 401(k) company to manage and monitor the plan. This may include online portals for plan sponsors and participants, reporting and analytics tools, and other resources that facilitate efficient plan management and decision-making.

One of the more unique and useful tools provided by 401GO is the custom portfolio builder. Participants who are uncomfortable choosing their own investments can answer a few questions, and the automation will create a custom portfolio based on their needs and their comfort level. 

Factor 6: Reputation and Track Record

Advisors also evaluate the reputation and track record of the 401(k) company in the industry. They may look for established companies with a history of providing reliable and reputable services, as well as good customer reviews and testimonials from other plan sponsors or financial professionals.

We recommend checking G2 reviews for an honest assessment of the reputation of your 401(k) provider. Look for overall rating, read 1-star reviews to see what reasons unhappy customers cite, and pay extra attention to customer service ratings.

Factor 7: Support and Resources

Financial plan advisors may also consider the level of support and resources offered by the 401(k) company specifically for advisors. This may include access to education, marketing materials, and support from a dedicated advisor support team to help them effectively serve their clients and grow their retirement plan business.

Business owners and their admins receive a dedicated relationship manager when they use 401GO and advisor partners have their own partner portal to help them monitor the health of the plans they oversee.

While 401GO automates as much as possible, we never automate relationships. Our customers can always expect superior customer support from highly-trained experts.

Do What Plan Advisors Do

After carefully evaluating these factors, more and more financial plan advisors are choosing 401GO as a 401(k) company that aligns with their clients’ needs, goals, and expectations, and enables them to provide comprehensive retirement plan solutions to their clients. Do what financial advisors do. Choose 401GO.

Secure your future today. Enroll in your 401(k) plan now.

Dustin Stadel
Having worked in the retirement industry for many years, Dustin is skilled at helping financial advisors give their small business clients the best benefits for their teams.
Secure your future today. Enroll in your 401(k) plan now.