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Alex Goldberg

In this Article

In this Article

About the Author

Alex Goldberg

Alex is a growth marketer, behavioral economics buff, and lover of all things Direct-to-Consumer. He enjoys scaling early-stage companies and working to bring transparency to opaque industries. He is a UC Berkeley grad, an aspiring retired golfer, and an avid soccer fan.

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Vestwell Review – Can it Streamline Your 401(k) Plan Administration?

In this Article

Alex Goldberg

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  2. Fintech
  3. Vestwell 401(k) Review
Rating: 4.7 / 5

Today we review Vestwell – one of the most popular workplace savings providers for small and medium sized businesses. Vestwell is a cloud based record keeping solution that allows small business owners to rest easy knowing their employees’ retirement plans are running smoothly behind the scenes. Let‘s see how well they achieve that aim and compare their solution to a few other popular SMB 401(k) providers to help you choose the best one for your business.



What differentiates Vestwell from traditional 401(k) providers?

Vestwell powers financial advisors aiming to scale their practice in the SMB space, employers searching for ways to introduce new benefits while minimizing administrative burden, and employees looking for a holistic view of their workplace savings accounts that is intuitive and easy to navigate. Here’s a few main reasons that Vestwell stands out: 


  1. Greater flexibility. Vestwell’s open-architecture solution means advisors can build the plan design and line-up that’s right for their clients without worrying about revenue sharing or proprietary funds. And advisors have the ability to deliver a white-labeled offering to their clients.
  1. Extensive payroll integrations. Deep integrations with leading payroll and technology providers saves time and mitigates errors, which means less headaches. Vestwell reduces the administrative work so advisors and employers can enjoy a more seamless experience all around. Read more about Vestwell’s payroll integrations below.
  1. Lower fees. Vestwell’s cloud-based platform increases efficiency and keeps costs down. Not only are Vestwell’s fees typically below industry benchmarks, but they are clearly disclosed in plain English, which means clients know exactly how much they’re paying and what they’re getting in return.


What 401(k) payroll integrations does Vestwell offer?

Vestwell has integrations with many major payroll providers, which reduces manual data reconciliation and costly data entry errors. They can use software to pull data from your payroll file, assuming your payroll provider is on their list of partners. Here’s a short list of payrolls that Vestwell currently works with, although they are expanding their partnerships rapidly:



How does Vestwell work for advisors?

Vestwell also offers a solution for financial advisors who are looking to better serve their clients in the workplace savings space. Their platform makes it easy for advisors to access participant account data and make personalized recommendations. Vestwell’s hosted solution ensures that the platform and data are always online and secure, rather than in spreadsheets. This is especially helpful for advisors who manage 401(k) plans for multiple clients, offering one single source of truth that updates as participants and employers make changes in their respective portals.


Vestwell offers a single source of truth for Advisors managing multiple retirement plans.


It’s also great for advisors who want to streamline their operations by letting software automate much of the administration so they can spend more time managing relationships and wooing more clients. In essence, Vestwell offers a solution that advisors can use to scale their business in the workplace savings and retirement space.



What kind of 401(k) investment lineup does Vestwell support?


When it comes to investment options, Vestwell offers quite a bit of choice. The platform supports over 10,000 funds, many of which are low-cost. This includes target date funds for employees who want to “set and forget”, as well as ESG funds for those who want to invest in a way that’s socially responsible, and even offers advisor managed accounts funds for those looking for a more personalized investment model. When it comes to investment lineups, Vestwell is flexible, and as a 3(38) or 3(21) fiduciary, their team can help you select the right investment options for your workforce 



What benefits does Vestwell offer employers? 


Overall, their Sponsor Portal shows a plan sponsor (i.e. employer) how well their plan is helping employees prepare for retirement. Vestwell makes it easy to see if a plan is out of compliance or is being underutilized by certain employees. It allows employers to track their company’s benefit plan(s) within one simple interface, while also providing access to reporting tools. Employers can use these reports to highlight trends or changes in their plans over time, as well as make adjustments to their plan setup as their business evolves. With all the insights at your fingertips, it’s much easier to know how to improve or adjust your plan.


Vestwell’s sponsor portal lets employers manage their 401(k) in one simple dashboard.


The platform is also very helpful in eliminating manual administrative tasks like notifying employees about contribution changes or processing mid year election changes. These features free up the sponsor from cumbersome administrative tasks that often lead to costly mistakes and frustrated employees.


For plan sponsors, Vestwell’s platform helps automate many tedious plan administrative tasks such as:

  • tracking participant data
  • maintaining contribution rates and schedules
  • reporting participant data
  • filing regulatory filings like the form 5500 and tax returns.


Vestwell’s services for plan sponsors


401(k) investment advisory: Vestwell’s team of Registered Investment Advisors (RIAs) can help you pick out the right fund lineup. If your employees want 100% passively managed investments or a fully managed portfolio, both are options. As your 3(38) or 3(21) fiduciary, they will work with you to offer a range of fund options and reduce your liability for these investments’ future performance as well.


401(k) plan management: Vestwell will not only help you start a retirement plan from scratch if you don’t already have one, they can also act as a 3(16) fiduciary. This means they can advise plan admins on which investments to offer, as well as sign the form 5500 and take any administrative liability off your plate as well. For most small business owners who aren’t ERISA (retirement plan law) experts, that’s a huge relief, since they are personally liable for any noncompliance penalties.


For employers who don’t want to switch or replace their existing 401(k) advisor, but merely want to leverage technology to offer their employees a better experience, Vestwell’s advisor solution is ideal. Overall, we love how flexible the platform is when it comes to creating a compelling experience for both plan sponsors and employees alike. More on that below!



What benefits does Vestwell offer employees? 


Vestwell offers an all-in-one software platform where employees can go to set, adjust, and understand their contributions to the company retirement plan.



One of the main components of Vestwell is an Employee Portal, which offers powerful tools for employees to better understand and manage their retirement funds, including dynamic financial goal-tracking and reporting tools. When an employee has questions about his or her plan, a personal Vestwell Advisor is available via phone or email to help provide personalized guidance. These participant Advisors work to ensure that all employee questions are answered, including those about fees and employer contributions.


Overall, the platform is as easy to use as it is extremely flexible, and greatly facilitates the 401(k) experience for everyone involved.



Vestwell alternatives: How does it compare to other small business 401(k) software?


While Vestwell has proven indispensable for many small and medium-sized businesses, there are several other popular technology-enabled 401(k) providers which are also worth evaluating prior to making a switch.


Here we will review the pros and cons of Vestwell versus its closest competitors — Human Interest, Guideline, ForUsAll, and Betterment for Business — to see how its platform stacks up in terms of features, pricing, and more.



Vestwell vs Guideline vs Betterment for Business vs ForUsAll vs Human Interest

Annual pricing $1,200 + 72
per employee
$1,440 + $48
per employee
$1,200 + $48
per employee
$1,500 + $72
per employee
$588 + $96
per employee
3(38) investment fiduciary services? ✅  ✅  ✅  ✅  ✅ 
3(16) administrative fiduciary services?
Managed portfolio option?
Software for 401(k) advisors?
Product Reviews You’re reading it 😉 Human Interest Review ForUsAll Review Betterment 401k Review Guideline Review

At the end of the day, each has a lot to offer compared to traditional advisors who aren’t using software to automate plan administration whatsoever. The option that’s ultimately best for you and your employees will come down to:


  1. Employee count (i.e. how many folks are in your organization?)
  2. Payroll (i.e. which software do you use, since not all of the options above integrate with every payroll software?)
  3. Investment philosophy (i.e. what do your people value?: fund lineup variety, 1-1 education, active management, low-fees, etc.)


For example, Vestwell offers more investment options than Human Interest, while Human Interest’s fund lineup may be more straightforward for employees to grasp. So, someone looking for a simple, easy to understand plan may be better served by Human Interest, while others may value Vestwell for its greater array of options and flexibility. 


If you’re a 401(k) advisor — not a plan sponsor — either Vestwell or Betterment will be your best option. If your employees insist on investing their retirement assets in cryptocurrencies, choose ForUsall. As you can see, there are many considerations when deciding between small business 401(k) platforms.



The Verdict: Is Vestwell legit for SMB 401(k) recordkeeping and advisory?


Vestwell offers an easy-to-use digital platform that aims to make it simpler to administer (and participate in) a company sponsored retirement plan. Through flexible investment options, fiduciary oversight, and automated plan administration technology, Vestwell eliminates many of the traditional roadblocks that traditionally plague plan sponsors at small and medium sized firms. 


By acting as a single point of contact, the firm has modernized the retirement system while keeping the advisor’s, employer’s, and plan participant’s best interests in mind.


We like how Vestwell’s user-friendly dashboard and automated compliance system make it ideal for use and accessibility in general. It’s truly a one-stop-shop for all things related to your retirement plan, taking the headache out of managing multiple vendors for recordkeeping, plan admin, financial advisory, and custodial services. Another advantage? Vestwell’s costs are about half of the average in the industry.


Whether you are interested in offering a retirement plan for your employees for the first time or need help with an existing plan, Vestwell is definitely worth considering. While their platform is helpful overall, it is best suited for:


  • Plan sponsors at small- or medium-sized businesses who want to simplify administration
  • 401(k) advisors managing multiple plans who want to streamline their administration efforts.


Interested in a modern, intuitive and cost-effective 401(k) offering? Schedule a call with their team today to learn more about how you can partner with Vestwell.


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About the Author

Alex Goldberg

Alex is a growth marketer, behavioral economics buff, and lover of all things Direct-to-Consumer. He enjoys scaling early-stage companies and working to bring transparency to opaque industries. He is a UC Berkeley grad, an aspiring retired golfer, and an avid soccer fan.

Learn more
Alex Goldberg

Alex Goldberg

Alex is a growth marketer, behavioral economics buff, and lover of all things Direct-to-Consumer. He enjoys scaling early-stage companies and working to bring transparency to opaque industries. He is a UC Berkeley grad, an aspiring retired golfer, and an avid soccer fan.

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