Top 401(k) plan providers include ADP, Fidelity, Paychex, ShareBuilder 401k and Vanguard, according to Chad Brooks for Business News Daily. These companies are among the top choices for businesses seeking customized options to suit the size of their workforce. Among the perks that make these companies popular are full-service portfolio management and mobile apps for real-time financial tracking on the go.
Business managers should avoid three major issues when choosing a fund management firm, explains Stuart Robertson for Forbes. First, they should look closely at a 401(k) provider with a vested interest in the fund. If one of the investment products is the fund manager's own company, it may not necessarily be a top performer. It is better to find an independent 401(k) provider.
Second, business managers looking for a 401(k) plan provider should compare each firm's fees. Typically, these fees cover investment, record-keeping and administration costs. Fee schedules vary, sometimes significantly, between providers, so finding one that charges less saves employees money, notes Robertson. The third thing to look for, especially for a small business, is protection from losses. A knowledgeable 401(k) plan provider who doubles as an investment manager for the business provides backup for employees. This specialized provider is called an ERISA 3(38) adviser; he selects portfolio products and monitors them, and manages the portfolio according to an established investment plan.