401(k) advisors, listen up—Capital One wants what’s in your wallet. The credit-card giant announced Tuesday that it has launched Spark 401k, a low-cost, all-ETF 401(k) plan.
Spark 401k is designed for businesses with fewer than 100 employees to deliver a “straightforward retirement planning experience that offers the benefits available to larger companies.” According to the company, benefits include the ability to build a retirement nest egg with tax-deferred dollars, reduce business taxes, and recruit and incentivize employees.
The new Spark 401k leverages the technology behind Capital One’s ShareBuilder 401k, it claims “pioneered the all-ETF 401(k) movement beginning in 2005.” Spark 401k also provides access to low-cost ETFs that keep investment expenses under one percent, helping employees further grow their nest egg.
“Today, only thirteen percent of small businesses offer a retirement plan2 and while many say they want to provide a plan, they often put it off because they think it will be too expensive, burdensome or complicated,” Stuart Robertson, president of Capital One Advisors 401k services, said in a statement. “We designed Spark 401k to make retirement planning easier and more accessible for small businesses. With its online plan management and direct access to licensed 401(k) advisors and customer success managers, Spark 401k can help small business owners plan for the future – for themselves and their employees – while they pursue their primary passion, running their business.”
With small businesses increasingly relying on mobile technology, Spark 401k provides owners a streamlined, digital experience to easily determine which plan best suits their needs. Spark 401k provides three types of 401(k) plans and oversees each plan’s investment fiduciary responsibilities for no additional cost. By providing a 401(k) plan, owners can save for retirement while deferring personal taxes, lowering business taxes, and qualifying for tax credits.
Spark 401(k) plans range from 27 percent to 68 percent less than the industry average at various data points from $50,000 plan with six participants to a $100 million plan with 2,000 participants, based on “401k Averages Book 2015 Data and Custom Benchmarking” report prepared for Capital One Advisors.
With more than 20 years serving financial markets, John Sullivan is the former editor-in-chief of Investment Advisor magazine and retirement editor of ThinkAdvisor.com. Sullivan is also the former editor of Boomer Market Advisor and Bank Advisor magazines, and has a background in the insurance and investment industries in addition to his journalism roots.
