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Fidelity Small Business 401(k) Review for 2026
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Fidelity 401(k) for Small Businesses
Fidelity Investments offers a 401(k) plan for both small and large businesses. Officially called the Fidelity Advantage 401(k)℠, it gives employers a number of benefits, mainly because Fidelity acts as the plan administrator. Here are the details:
Overview of Fidelity's Business 401(k)
The Fidelity Advantage 401(k) is available to businesses with two or more employees. There is no upper limit on the number of employees, so even a large corporation can use it as its 401(k) plan. Even so, the Advantage 401(k) is built for small businesses. In either case, the business must have at least two employees, so a sole proprietor with only one worker does not qualify.
Fidelity's business 401(k) plan provides accounts in both Roth and Traditional formats. That means contributions can be made on either a pre-tax or after-tax basis.
Contributions to an Advantage 401(k) account vest right away and can be made by both the employer and the employee. Because this is a safe-harbor 401(k), the employer can match an employee's contribution (up to 4%). Fidelity does not allow loans from its Advantage 401(k).
Special Features
One feature that makes Fidelity's Advantage 401(k) stand out is that Fidelity serves as both plan fiduciary and administrator. This means Fidelity takes care of many of the everyday responsibilities that come with this kind of retirement plan. In particular, Fidelity handles these tasks:
- Monitors contributions and makes sure they are handled properly
- Sends important information about plan updates and disclosures
- Takes care of tax filings tied to the 401(k)
- Processes distributions from the plan
Fidelity has teamed up with Paylocity to offer full payroll integration for its Advantage 401(k) clients. This partnership allows automatic contribution processing and real-time data syncing.
Opening a Small Business 401(k) at Fidelity
Opening any kind of 401(k) plan is usually more involved than opening a taxable brokerage account or IRA. To get started, go to any page on the Fidelity website and find the link at the top to open a new account. On the next page, look for the link to show all account types (the Advantage 401(k) will not appear in the short list). Scroll down until you find the tile for the "401(k) Plan for Small Businesses℠." That is the one you need. You can click the description to read more or simply press the green button to open an account.
The button brings up a page asking for the employer's information. Fidelity will then follow up for more details, and that is when the application process begins. An adoption agreement will eventually have to be completed and sent to Fidelity. This document creates the plan, which is separate from the individual accounts. Each account will need its own application.
Possible Investments in Advantage 401(k) Plans
Like most 401(k) plans of this type, there is a limited menu of available investments, which in this case are Fidelity Flex® mutual funds. Employees can choose from two lists. One is a group of target-date mutual funds meant for retirement saving. The other is a smaller group of funds that aim to cover different parts of the market. They are:
- Fidelity Flex® 500 Index Fund (FDFIX)
- Fidelity Flex® Mid Cap Index Fund (FLAPX)
- Fidelity Flex® Small Cap Index Fund (FLXSX)
- Fidelity Flex® International Index Fund (FITFX)
- Fidelity Flex® US Bond Index Fund (FIBUX)
- Fidelity Flex® Government Money Market Fund (FLGXX)
Fidelity 401(k) Education
Fidelity's website has some helpful 401(k) resources that both employees and employers may want to review. Examples we found include:
- 3 things to consider when starting a 401(k)
- What is a pooled employer plan?
- 4 questions to ask when evaluating 401(k) providers
Fidelity Advantage 401(k) Pricing
Although most accounts at Fidelity have no fees at all, the Advantage 401(k) is an exception. This small business 401(k) has fees for both the employer and the employee. The employer must pay a one-time $500 activation fee and a $300 quarterly fee. The employee pays a $25 quarterly fee plus a 0.125% quarterly fee.
Even though these charges are not exactly pleasant, Fidelity takes care of all administrator duties for the 401(k). It also charges nothing for its educational materials. On top of that, the Fidelity Flex® mutual funds used in the Advantage 401(k) have zero expense ratios, which gives employees a solid value.
Rollovers, Transfers, and Withdrawals
In certain situations, Fidelity will allow rollovers and transfers into or out of its Advantage 401(k) accounts. There may be fees in some cases for these services. Fidelity also has a large IRA program, so it is possible to roll money into a Fidelity IRA after leaving an employer that has adopted the Advantage 401(k).
Schwab's Business 401(k) as an Alternative
If the Advantage 401(k) at Fidelity does not appeal to you, Schwab's small business 401(k) may. It can
be set up with a Personal Choice Retirement Account (PCRA), which means the 401(k) participants get
access to a
much wider range of tradable products. These include stocks, options, ETFs, bonds, and mutual funds from non-Fidelity and non-Schwab families (mutual funds without expense ratios won't be on tap).
Like Fidelity, Schwab offers both Roth and Traditional contribution options into its small business
401(k).
Free Charles Schwab Account
Visit Schwab Website
Updated on 3/27/2026.
Chad Morris has been analyzing investment firms for Brokerage-Review.com since 2015. Backed by FINRA Series 65, 66, and SIE credentials, his work reflects a deep knowledge of the retail brokerage industry and digital trading tools.
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