Ascensus Review: Pros, Cons, and Features

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

As a self-employed person, you are responsible for all aspects of your financial life, including health and life insurance, salary payments and retirement planning.

Unfortunately, setting up a retirement account is a challenge for many self-employed people.

But that is starting to change. Among other things, the large brokerage firm Vanguard is now outsourcing the management of its individual 401(k) accounts to Rise. Consequently The Vanguard account is now more expensive, but the service has improved. Here's what you need to know about the new platform.

• Individual 401(k) with Vanguard fund options
• Flat fees, regardless of how much money you have in your account
• Easier user experience compared to other Vanguard products

What is Ascensus?

With more than 14 million users on the platform, Ascensus is the largest third-party data custodian and manager of numerous investment accounts. Founded in 1980, Ascensus now manages accounts such as SEP IRAs, Simple IRAs, 529s, ABLE accounts, and individual 401(k) plans (to name a few).

Ascensus offers a forward-looking technology approach that is often only given prominence by large brokerage houses and completely ignored by fintech startups.

What does it offer?

Ascensus offers data retention and account management services for dozens of account types, including 529 plans, ABLE accounts, and even annuities. 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 Vanguard's individual 401(k) accounts as well.

Invest in Vanguard Mutual Funds

Ascensus allows self-employed individuals 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. Although the fund list is limited, most investors will be able to find a suitable mix of low-cost funds to help them meet their investment goals.

Simple electronic rollover

If you want to transfer an IRA or existing 401(k) balance to your new Ascensus account, Ascensus makes it easy. The transfer is done electronically and you can select new funds once your account is balanced. The U.S.-based customer support team can help you if you have any issues with the transfer.

Pay electronically into your account

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

Roth or traditional options

Ascensus accepts both Roth contributions (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) Loan

Although 401(k) loans come with additional fees, you can borrow against your 401(k) account if you really need the money. This is usually better than cashing out your 401(k), although we recommend building up an emergency fund before investing aggressively for retirement.

Are there any fees?

Ascensus charges a modest $20 annual custodian fee to cover bookkeeping 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.

How does Ascensus compare?

Although Ascensus is one of our top solo 401(k) providers, its fee structure and investment restrictions make it less attractive than other competitors.

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

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

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		Stocks, ETFs, mutual funds, bonds, options	Stocks, ETFs, mutual funds, bonds, options
	$20 (plus $20 per Vanguard fund)
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How do I open an Ascensus account?

To open an account with Ascensus, select the “Begin Setup” button on the Ascensus Individual(K) page. To open an account, you will need an Employer ID number from the IRS. First, enter your first and last name and email address in the form. A set of documents called a Plan Establishment Kit will be generated. When you complete these documents, Ascensus can set up a plan for you.

Is it safe and secure?

Ascensus offers comprehensive security. It allows for safe and secure transfer of funds between accounts and provides bank-level security for all accounts. Although there are always risks involved with online banking or investing, Ascensus is a safe platform for investing in Vanguard funds.

Of course, any investment involves risk of loss. Investing in Vanguard Funds through Ascensus is no exception. Your account balance may decline when you invest with Ascensus.

How do I contact Ascensus?

You can email Ascensus at iksales@ascensus.com or call them at 833-889-2333. The customer service line is open from 8:00 a.m. to 5:00 p.m. CST.

Is it worth it?

Overall, Ascensus doesn't seem worth it at this point. Many competitors offer free or low-cost alternatives with similar investment options. Even existing Vanguard customers may want to avoid this account, as they will have to use a different website to manage their account. At this point, we'd recommend skipping the new account platform, but if you already have an account with Ascensus, there's no compelling reason to switch.

Check out Ascensus here>>

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