Human Interest is a popular 401(k) provider for small and medium-sized businesses. The company was founded as Captain401 in 2015, rebranded as Human Interest in Q3 2018, and have raised almost half a billion dollars in venture funding to date.
Given that level of investment, what does the firm has to show for it? Human Interest offers “no-touch” integrations with 50+ leading HCM providers to eliminate the burden of managing your 401(k) plan. These robust payroll integrations make it easier to administer than many traditional providers, especially for fast growing companies who are constantly onboarding new employees.
In this article, we review Human Interest in-depth and highlight several key differences from traditional small business 401(k) providers.
Human Interest Pros + Cons
SMB 401(k) Provider | Pros | Cons | Fees | Features |
|---|---|---|---|---|
| No federal income tax for contributions up to the $19,500 or $26,000 limit | Reports of slow customer service | 0.50% of plan assets per year + employee fees | Automated Administration
Compliance Monitoring Dedicated Support Team | |
| Guideline | System integration. Portfolio. Heavy testing. | Lack of customization. Only for small businesses (not cost-effective for lots of employees) | 0.08% of plan assets per year + employee fees | Plan administration Recordkeeping Compliance testing Investment management |
| Vestwell | Easy-to-use website. Track your 401k plan performance. Easily change your contribution amount anytime. Customize risk-averse or aggressive investment strategy. | No tax advisors. | $1200 annually + employee fees | Design and investment flexibility Modern experience Competitive pricing Streamlined administration Extensive integrations Fiduciary oversight |
| Forusall | Automatic enrollment and stepped-up savings. Low annual fee. Low-cost funds. | Not suitable for traders. | $120 + $6 employee fees per month | Data validation checks. Transfer up to 5% of the balance into a secure account regulatory compliance Investment management. Personalized employee communications. |
| Betterment at Work | Multiple portfolio options. No minimum amount required Fractional shares. | No direct indexing. | Customized prices | Fee transparency Good user interface Good recordkeeping |
Why We Recommend Human Interest
High degree of fee transparency
Unlike many traditional 401(k) providers, who intentionally make it hard to understand the full price of the retirement plan, Human Interest has up front pricing split between what the company will pay and what the employees will pay.
Open to small businesses
Human Interest is happy to serve companies that do not yet have plans, and companies that have plans in the hundreds of thousands of dollars. This is different than most traditional providers, who only want to work with companies that already have millions in 401(k) assets.
Robust Payroll Integration
Human Interest saves business owners time by linking 50+ payroll providers with the 401(k) system, eliminating time consuming (and error prone) administrative work.
Easy to Use Interface
While many of the traditional providers are catching up with their web experience, Human Interest has the well designed user interface that you’d expect from a Silicon Valley technology company. In fact, Human Interest has 2x the industry average for participation rate because of its easy onboarding and built-in investment advice.
All-in-one
While most 401(k) providers rely on third parties, Human Interest has built its own in-house recordkeeping platform, so there’s no external partners to rely on. You and your employees can find everything related to your 401(k) in one spot.
No transaction fees
This includes for both employers and participants. If you’ve ever managed a 401(k) plan before, you may have heard of plan amendment fees, plan restatement fees, and/or plan termination fees. Likewise, participants in traditional 401(k) plans are charged additional fees on their qualified distributions (QDRO), loan initiation / maintenance fees, and more.
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Is Human Interest a Fiduciary?
Human Interest offers two standard levels of investment fiduciary protection to the plan sponsor:
- 3(38) or
- 3(21)
3(38) investment fiduciaries are responsible, and take legal liability for, choosing and monitoring the investment options in the plan. Thus Human Interest will choose and update the funds in the 401(k) plan when you (the plan sponsor) hire them as the 3(38) fiduciary.
3(21) investment fiduciaries act as co-fiduciaries, whereby Human Interest will provide advice to an employer with respect to funds on a 401(k) investment menu, but the employer will retain the discretion, and legal liability, of accepting or rejecting the advice.
Additionally in their more expensive / premium tiers — their Complete and Concierge packages — they can also act as a 3(16) fiduciary, meaning that they take on the legal liability for signing the Form 5500 for the Department of Labor and ensuring that the fund is perfectly administered. Signing a form for you each year may not sound like much, but in reality it provides a lot of peace of mind because it means if the plan is audited and found to be out of compliance, Human Interest will be on the hook.
What Payroll Does Human Interest Integrate with?
One of the biggest benefits of working with a modern 401(k) startups is payroll integration. Human Interest can connect and process data from over 50 payroll providers, and is adding more every day. Here are a few of the most prominent, with a full list below:
For a full list of payroll softwares that Human Interest integrates with, visit their website:
The Verdict: Is Human Interest Legit?
If you’re a small business without a 401(k) plan currently that would like to help your employees save for retirement, Human Interest offers easy-to-navigate dashboards for both you, the plan sponsor, as well as plan participants (i.e. your employees), for a very competitive cost.
Roger Lee, the co-founder and former CEO of Human Interest (formerly called Captain401), has said, “The retirement system today is hurting working Americans. Nearly half don’t even have access to a 401(k), and the ones who do are in badly mismanaged accounts.” The startup has written that they want it to be painless and easy for a small business to setup and run a retirement plan, and believe that it is important for them to act as fiduciaries.
According to their CEO, Jeff Schneble: “Human Interest 401(k) plans are affordable and easy to use, which means they’re great for employers who want to offer a 401(k) for the first time and haven’t offered a 401(k) before. And, for employers that already have a 401(k), we may be able to help reduce their costs. Today, when financial security matters more than ever, it’s important to offer a retirement benefit to your employees.”
Overall, Human Interest offers an affordable option for any small business looking to automate their retirement plan benefit from scratch. If you have over 100 employees, however, their fee structure may start to be cost prohibitive. The company is backed by solid venture capitalists and raised a $200m series D in 2021, valuing the firm well over a billion dollars.
Frequently Asked Questions (FAQ)
What are the Best Human Interest Alternatives?
When it comes to competitors, there are a few Human Interest alternatives you should check out that also leverage technology to streamline 401(k) admin. Our favorites are:
How Much Does Human Interest Cost?
Unlike most 401(k) advisory firms, Human Interest publishes transparent pricing with the following fee schedule:
- Employer fees: $120 per month plus $4 per employee per month
- Employee fees: 0.50% per year of assets plus approximately 0.07% per year in fund fees
- Set up fees: $499, typically paid by the employer
They offer three plan levels and additional time-saving services are available in the Complete and Concierge plans, including procuring the required ERISA bond, serving as a 3(16) fiduciary, signing and filing Form 5500 on your behalf, and having a dedicated account manager.
Why is Payroll Integration Important?
Not all providers offer payroll integration, but it’s essential in our eyes because administering a 401(k) plan can be very manual, time consuming and error prone in a fast growing business. As the plan sponsor (the company sponsoring / offering the retirement plan), you are responsible for making sure that when employees make changes in payroll they are reflected in the 401(k).
For example, if an employee reduces their savings rate from 10% to 6%, or if they get a raise, the person running the plan is legally required to make sure that the correct amount of money is taken out of the employee’s paycheck and deposited into their retirement account. There can be large penalties for getting this wrong, so this feature of Human Interest saves a ton of time and headache.
Methodology
We conduct extensive research to evaluate the pricing, effectiveness, accessibility, overall quality, and user experience of each product we review. This also included examining and comparing them to several alternatives.
| Review Process | Key Metrics | Weighting |
|---|---|---|
| Purchase online | – ease to complete intake form – affordability – upfront commitment or subscription required? – money back guarantee or refund policy? | 1 |
| Shipping + unboxing | – shipping cost – time from order to treatment delivery – sustainable packaging | 1 |
| Testing + journal for 1-3 months | – ease of use – transition into habitual use – taste / smell / feel / pain | 1.5 |
| Results after 3 months of use | – efficacy / results – ease of forming a health habit – requires additional purchae? – responsive customer support – willingness to recommend to a friend | 1.5 |
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