Cash Balance Plan Providers: How Does Fidelity, Schwab and Vanguard Stack Up?


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At Emparion, we are a little biased. We believe we are one of the best cash balance plan providers in the marketplace today. We feel like the service and communication that we provide are just superior in the industry. But of course each provider probably feels the same way. We understand that.

Large institutional cash balance providers can play the custodian role and can offer secure investment options within their platforms. In lieu of providing diverse plan options, they offer peace of mind with safe investments and reliable accounts. However, the retirement planning process can require more effort than just your contributions.

What we felt we would do is take a closer look at the cash balance offering by some of the most popular and well-known brokerages in the industry. That would compile the best traits of each for you, a business owner, to peruse and determine which provider would suit you best. Let’s get started.

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The good news is that our plans can be used on any of these platforms. You can use our plan document and open up an account with any of these providers as the custodian. That way you can get our tax planning and structuring services combined with the investment offerings of the large players. It is truly a win-win.

Let’s start with Vanguard

Probably the most recognizable name in the industry, Vanguard has a reputation of being trustworthy and reliable. Vanguard offers a lot of hands free services and convenience.

However, upon calling and chatting with their cash balance support I learned that they no longer provide plan administration services. They work with 3rd party companies to handle plan compliance. Also they cater more towards custodial responsibilities and investment opportunities.

Charles Schwab

It was easy to determine with a quick glance at their website that Charles Schwab provides custodial and administrative services. They cater to business with one participant plans and up.

There are set up and annual service fees that are required, and are determined by the amount of participants in the plan. Schwab also provides administrative services to keep plans compliant, for a price.  You can see all of their services and pricing here.

Fidelity

After searching their website for information regarding cash balance plans, we spoke with their customer service and learned that they are not as familiar with this plan set up. They offer a variety of IRA’s and 401K plans.

Scrabble pieces spelling TAX

Their focus is mostly on custodial services. Fidelity does not have setup fees or annual fees. They offer tools and information regarding the plans to help business owners become more knowledgeable about the process, which you can find here.

Best Cash Balance Plans: TD Ameritrade

TD Ameritrade offers 401K and IRA options for retirement. They do not offer anything for cash balance or defined benefit plans. They have lots of online tools and educational portals to help clients learn about retirement solutions. TD Ameritrade also provides investment options for retirement plans.

The large institutional players want you to invest in their fund and investment offerings. Whereas, boutique cash balance plan providers like us provide a different perspective. We provide more hand holding and upfront consulting. In fact, we like to discuss the tax impact of all plans. Our plans allow you to invest your money how you see fit. You are not stuck with one specific platform.

How to determine the best cash balance plan providers

Take a look at the table below:

Emparion: Custom plans for all custodians.We work with all the large custodians. We set up the plan and they are the custodian. Simple and efficient.
Charles Schwab: A leading discount brokerage.Schwab is probably the preferred custodian for many of our clients. This is for good reason as they have a large investment selection.
Vanguard: Known for low-cost mutual funds.Everybody knows of Vanguard because of their low-cost mutual funds. But they do bring retirement services to the table.
Fidelity: Wide range of services.Fidelity offers many solutions including investment advisory, insurance, etc. They are a popular choice for many.
Etrade: Still a favorite for active traders.Etrade has always been a favorite for traders, but they really aren’t that known for their retirement services.

As a business owner, we understand that your priority is keeping your business running. Retirement planning is not one size fits all.  Setting up a plan that meets your needs that doesn’t distract you from your day to day responsibilities is the optimal place to be. You’ll need a partner that you can trust, and we hope we helped shed some light on what that means to you.

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Paul Sundin

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