How to choose The Right 401k Administrator
Your best source for a 401k administrator is your financial advisor or your CPA. Once you have a name of a 401k administrator, your first step is to determine if they are qualified to handle your 401k. The first question you should ask the 401k administrator is, what size 401ks do they handle? Do they handle mostly small groups with 50 employees or less? Do they handle mainly medium to large groups with 75 employees or more? This is important because a 401k administrator that serves only larger 401k plans, may not give the proper customer service to a company with 15 employees.
Next, you should look at price. All 401k administrators charge an annual fee for their services. Obviously you want someone who is affordable. However there are a few things that you should not skimp out on. Parachutes for example, are not something that you should buy on price for obvious reasons. 401k administrators are also not something that you should buy based on price.
When pricing 401k administrators, you should ask if they get paid by the financial institution. Some 401k administrators also get paid by the financial institutions they work with. For example, if your 401k money is with John Hancock, you should ask if the administrator is getting money from John Hancock. If they are getting money from a a financial institution, ask whether the 401k administrator will reduce the fees.
You also want someone who is sought after by the media. Why is this important? If your 401k administrator is consistently being interviewed by journalists, it means that they are knowledgeable in their field and they can communicate their ideas easily. This is important as 401ks can be quite complex.
Most importantly your 401k administrator should be able to offer you things that other administrators can’t. To learn what we can do for you that others cant, please visit our Tax Free Page
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