Ascensus Review: Pros, Cons, And Features

Ascensus is a third-party administrator of many different types of investment accounts, including individual 401(k) accounts and 529 plans.

As a self-employed person, you’re responsible for all aspects of your financial life, including health and life insurance, paying your salary, and saving for retirement. 

Unfortunately, setting up a retirement savings account has been challenging for many self-employed individuals. 

But that’s starting to change. Among other changes, major brokerage, Vanguard, is now outsourcing its individual 401(k) account management to Ascensus. As a result, the Vanguard account is now more expensive, but the service has improved. Here’s what you need to know about the new platform.

With more than 14 million people using the platform, Ascensus is the largest third-party record keeper and administrator of numerous investment accounts. Founded in 1980, Ascensus now administers accounts ranging from SEP IRAs, Simple IRAs, 529s, ABLE accounts, and Individual 401(k) plans (among others).

 Ascensus brings a technology-forward approach that is often an afterthought at major brokerages and ignored entirely by fintech startups.

Ascensus offers record-keeping and account management services for dozens of account types including 529 plans, ABLE Accounts, and even Pensions. However, this review focuses primarily on the Individual 401(k) plan that Ascensus manages for Vanguard. It’s worth noting that many of these benefits extend to accounts outside of the Vanguard individual 401(k) accounts.

Invest in Vanguard Mutual Funds

Ascensus allows self-employed people to invest in Vanguard’s low-cost index funds. The account is limited to Vanguard’s funds, and you can only invest in mutual funds, not exchange-traded funds (ETFs), individual stocks, or other options. While the fund list is limited, most investors will be able to find an appropriate balance of low-cost funds to help them meet their investment goals.

Simple Electronic Rollovers

If you want to roll an IRA or an existing 401(k) balance into your new Ascensus account, Ascensus makes that easy. The rollover will be completed electronically, and you can select new funds once your account settles. The US-based customer support team can assist if you run into trouble with rollovers.

Fund Your Account Electronically

The major brokers are finally allowing you to fund your individual 401(k) electronically, and Ascensus is no exception. You can set up automated or manual transfers from your checking account into your 401(k) account. This type of automation can help you stay on track for retirement.

Roth or Traditional Options

Ascensus accepts both Roth (already taxed) and Traditional (tax deferred) contributions to your 401(k). As a self-employed person, you can contribute as both an employee and an employer. All “employer” contributions must be traditional tax-deferred contributions.

401(k) Loans

Although the 401(k) loans have extra fees associated with them, you can borrow against your 401(k) if you really need the funds. This tends to be better than cashing out the 401(k), although we advise that you save up an emergency fund before investing aggressively for retirement.

Ascensus charges a modest $20 annual custodial fee which is the fee charged for record-keeping and other administrative work. However, it also charges an additional $20 per Vanguard fund per year. If you have 10 funds in your account, you’ll be charged an additional $200 per year. Be careful, or these fees could add up.

Although Ascensus is one of our top Solo 401(k) providers, its fee structure and limits on investments make it less appealing than other competitors.

The Solo 401(k) at E*TRADE is still our top option based on low costs, ease of use, and variety of account and investment options. The 401(k) offered by Charles Schwab is a close second now that it offers the Roth option.

While Ascensus offers a great user experience and a good blend of Vanguard investment options, the fee structure can be prohibitively expensive, especially for those just starting to invest in their individual 401(k).

To open an account at Ascensus, select the “Begin Setup” button from the Ascensus Individual(K) page. You must have an Employer ID Number from the IRS to open an account. To start, provide your first name, last name, and email address in the form. A set of documents called a Plan Establishment Kit will be generated. Filling out these documents will allow Ascensus to set up a plan for you.

Ascensus has comprehensive security. It allows for the secure and safe transfer of funds between accounts and it has bank-level security for all accounts. While there is always risk in banking or investing online, Ascensus is a secure platform for investing in Vanguard Funds.

Of course, every type of investing involves the risk of loss. Investing in Vanguard Funds through Ascensus is not an exception. Your account balances may decline if you invest at Ascensus.

You can email Ascensus at iksales@ascensus.com or call them at 833-889-2333. The customer service line is open from 8AM to 5PM CST.

Overall, Ascensus doesn’t seem to be worthwhile right now. Many competitors offer free or low-cost alternatives that have similar investment options. Even existing Vanguard customers may want to skip this account because they will need to use another website to manage their account. At this point, we would recommend passing on the new account platform, but if you already have an account with Ascensus, there’s no compelling reason to switch.

Check out Ascensus here>>