Human Interest 401(k) Review: Pros, Cons, And Alternatives

Human Interest is a small business and solo 401k provider.

Historically, creating a 401k plan was a huge headache for small business owners. The hassles and costs often made the plan prohibitively expensive. 

However, companies like Human Interest are looking to change that. Human Interest provides low-cost 401k plans to small businesses. It takes care of the paperwork and hassle so that employers can focus on growing their business.

Here’s what employers need to know about Human Interest 401k plans.

What Is Human Interest?

Human Interest is a low-cost 401k provider that caters to small and medium-sized businesses. Founded in 2015, this San Francisco-based company is trying to disrupt a financial services model that favors big businesses and leaves small businesses to fend for themselves.

By focusing on robust technology and human-centered design practices, Human Interest is lowering the cost for employers who want to offer Traditional or Roth 401k plans (or other retirement plans) to their employees.

What Does It Offer?

Human Interest is an end-to-end 401(k) provider. It provides end-to-end customer and employee support, seamless payroll integration, in-house recordkeeping services, select fiduciary services, flexible plan design options, comprehensive employee onboarding, and more.

Seamless Payroll Integration

Human Interest integrates with more than 500 payroll providers. Once integrated, employees can set their desired contribution rate and let the deductions roll in automatically with each paycheck.

Additionally, employers don’t have to manually update contribution rules all the time. Instead, a Human Interest payroll integration helps ensure that employee details and changes are automatically synced, so plan administrators don’t have to worry about making changes

Employee Onboarding

Once an employer sets up a plan, Human Interest takes over. It provides a robust dashboard, in-product planning tools, onboarding seminars, on-demand access to retirement resources, and accessible customer service to help employees. Human Interest prides itself on a “people first” design that makes it easy for employees to start and keep saving.

Option For An Employer Match

Employers can choose from pre-built plans or customize their plans at no additional cost, which includes eligibility, matching, and profit sharing options to fit their needs.

Complete Record-Keeping Solution With Added Protection

Employers who have 401k plans have to deal with IRS and Department of Labor compliance. Human Interest can help reduce the liability, cost, and workload of 401(k) plan management.

Depending on the service package, Human Interest can help alleviate some of the financial stresses associated with unexpected DOL audits, provide proactive 360 Degree Monitoring and data alerts, and procure your ERISA bond to provide required plan insurance.

Plan Fiduciary Option

Employers can opt to have Human Interest provide select 3(16) Fiduciary Services. Human Interest will make some fiduciary decisions and reduce the employer's fiduciary liability. This is in addition to the comprehensive plan administration tasks that reduce the load for busy employers.

Employees Invest In Broad-Based, Low-Cost Funds

Human Interest, through its registered investment adviser, Human Interest Advisors (HIA) uses broad-based, low-cost mutual funds. HIA provides adequate options to help employees invest in a broadly diversified portfolio.

Human Interest investment options include options from Vanguard, Dimensional Fund Advisors, BlackRock, Nuveen, and others.

Model Portfolio Options

Employees can opt to use Human Interest’s Model Portfolios. This service automatically allocates investments based on an employee’s age and risk tolerance. It also rebalances each person’s portfolio quarterly. 

Are There Any Fees?

With Human Interest, both employees and employers pay different fees. A recordkeeping asset fee of 0.05% paid to Human Interest Inc., an investment advisory fee of 0.01%, paid to Human Interest Advisors, and an average fund fee of .006%, monthly**

Below are the fees for employers and the services provided.

How Does Human Interest Compare?

Human Interest isn't the lowest-cost 401(k) provider for small business owners; but it's a high-value provider. The company automates reporting, provides onboarding, options for an employer match, customer support, and can serve as a plan fiduciary.

Historically, few companies offered these features to small business owners. Today, however, a few other companies like Employee Fiduciary and Guideline provide similar services. And depending on the number of active participants in the plan, their pricing may be lower than Human Interest’s.

At the end of the day, Human Interest may provide all the features an employer wants. But employers have options, including lower-cost options in many cases. Employers may want to consider each of the best 401(k) providers for small businesses before committing to Human Interest.

How Do I Open A Plan?

Human Interest offers Fast Track 401(k) to help small businesses set up a plan in less than 10 minutes by reducing the guesswork through recommended plan designs.

Employers can also work with the Human Interest sales team to set up a plan. Human Interest can help guide employers through the setup process or rollover process if they already have an existing 401(k) plan.

To start a consultation, employers can fill out an online form and request a consultation. Human Interest employees can guide employers through the setup process (and rollover process if they already have an existing 401(k) plan).

Is It Safe And Secure?

Human Interest has several measures in place to keep assets and information safe. First, all plan assets are held in a custodial account at Matrix Financial Services.

Second, it uses bank-level encryption and password encryption to keep user information safe. The company adheres to banking level standards of security. 

How Do I Contact Human Interest?

Human Interest is headquartered in San Francisco. The address of its headquarters is 655 Montgomery St Suite 1800, San Francisco, CA 94111.

Employers considering a 401(k) plan can speak with a sales representative by calling 877-475-0179. Those who prefer electronic communication can request a consultation using this signup form.

People who need customer support can call 855-622-7824. They can also request support using the online support forms or by emailing support@humaninterest.com.

Is It Worth It?

Human Interest is a leading low-cost 401(k) provider for small businesses. Employers who see 401(k) plans as a huge headache may be happy to pay a company like Human Interest to provide that service for them. Other providers may provide more features at a lower price, but prices tend to vary based on the number of employees and other factors.

Especially cost-conscious employers should price compare between Ubiquity, Guideline and Human Interest. Those focused more on functionality may want to compare between Guideline, Betterment, and Employee Fiduciary.

Check out Human Interest here >>

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