Solo 401k Provider Review: Don’t Make This Mistake

At Emparion, we are of course providers of solo 401k plans. But what we really specialize in are cash balance plans and defined benefit plans. However,  we do get questions regarding other solo 401k providers. So we decided to do a comparison.

Our plans offer business owners the ability to be their own trustee and essentially “self-direct” their own investments with checkbook control.

We looked at the large traditional providers, but then also did a broad comparison to third party providers (like us). We are not going to give you our opinion. We will stick to the facts and refer you to the sites of our competitors so you can take a closer look. The goal is to give you as much information as possible so you can make an informed decision.

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The following questions should be answered when engaging a solo 401k provider:

  • Do they offer both traditional and Roth contributions?
  • Do they offer a loan provision?
  • Are there restrictions on the types of investments or the investment platform?
  • Do they allow rollovers in and out of the plan?
  • What are the set up fees and are there any annual maintenance fees?

Of course, we cannot review every provider. But we will take a look at some of the largest providers in the marketplace, including Fidelity, Schwab, Vanguard, and TD Ameritrade. So let’s dive in.

Solo 401k Providers: Fidelity

Fidelity has a long history of being a lost cost provider. They have wide ranging products and services. But they are lacking a bit when it comes to a comprehensive solo 401k solution.​

While they offer no set-up fees and have no annual maintenance costs, they currently do not allow Roth contributions nor do they offer a loan provision. Fidelity offers rollovers, but does not allow in-service distributions.

But of course you have plenty of low-cost investment options to choose from. This includes 100 or so ETFs that can be traded commission free.

Solo 401k Comparison

Like the other providers who act as trustees or custodians, Fidelity provides quality financial reporting. This includes a valuation report that includes any contributions received, any distributions paid, and the total account earnings. Check out Fidelity’s offering here.

Solo 401k Comparison: Vanguard

Vanguard has one of the best investment names in the business. They are known for having some of the lowest mutual fund and ETF around.

Vanguard offers both traditional and Roth contributions, but do not allow rollovers into their plans nor do they allow loans.​ Similar to other platforms, Vanguard restricts participant investments. Interestingly, plan investments are restricted to only Vanguard mutual funds and do not even allow Vanguard ETFs.

Vanguard does not charge any setup or annual fees, but they do charge an annual fee of $20 per fund for each fund held inside the account. Accordingly, if you have 10 funds inside your account, your fees would be $200 annually.​ The good news is that these fees are waived if you have at least $50,000 in assets with Vanguard.

Find out more about Vanguard’s solo 401k here.

Solo 401k Providers: TD Ameritrade

TD Ameritrade offers one of the more flexible and cost effective plans on the market. They allow both traditional and Roth contributions. They also have a loan provision.

They have no set-up fees or annual maintenance costs. They also have many investment choices on their platform, including Vanguard ETFs that are commission free.

I have personally used TD Ameritrade for certain non-qualified accounts and have had no issue with their service. Check out TD Ameritrade’s solo 401k option here.

Solo 401k Comparison: Schwab

Schwab has been making inroads in the solo 401k space. They have no set-up fees and no annual maintenance costs. ​They are another provider who offers traditional 401k contributions, but no Roth option. They also do not have a loan option.

self directed Solo 401k Providers

Schwab plans are not as flexible as plans offered by TD Ameritrade, for example. But they do have a good reputation in the industry. You can take a look at Schwab’s plan here.

Self-Directed Solo 401k Providers​

In reviewing the popular providers, it becomes clear. They all tend to be a low cost, but somewhat inflexible options. If you are looking to invest directly on their platforms they tend to be cost effective options.

However, many solo 401k investors are searching for robust options that offer the flexibility of alternative assets offerings. The result is that boutique third party providers were created to provide customized solutions.

The benefits to self-directed 401k providers are:

  • ​Flexibility in choice of brokerages;
  • The ability to invest in alternative assets like bitcoin, real estate, precious metals, trust deeds, etc; and
  • The ability to have full checkbook control.

But for that added flexibility you will pay. The brokerage providers have an incentive to keep costs low as they may money when you invest in assets on their platforms. But this is not the case with the self-directed solo 401k providers. They don’t sell assets to you, so they make money on the plan set-up and annual maintenance fees. Many providers charge as much as $1,000 to set up a plan and annual fees could run up to $300.


With the flexibility of self-directed solo 401k providers you can have have an account at Fidelity, an account at Schwab and also invest in real estate – all within the same solo 401k plan. ​

So which is the best one?

The advantages of solo 401ks are clear. Now we can’t tell you which provider we think is the best one (we are a little biased). They all have their pros and cons.

But with so many options, how do you choose the best one for you?

Now realize that provider plans can be updated and revised. So the above points are subject to change. But in reality, if you are are fine with investing in just traditional stock and mutual fund investments you probably can’t go wrong with any of the providers.

However, if you are looking to invest in alternative assets then you will have to select a self directed solo 401k provider. Sure, you will have higher fees. But hopefully the investment returns and flexibility will more than offset higher costs.

Paul Sundin

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