The Capitalize service is good for anyone needing help or wanting to save time finding and consolidating their old 401(k)s because Capitalize handles the whole 401(k) search and IRA rollover process from start to finish. Capitalize’s service is also free of charge.
Capitalize’s basic 401(k) search and rollover service is free, but you can upgrade to a membership package, called Capitalize Plus, if you want to speed up the process or prefer to roll over your 401(k) to an IRA provider that’s outside Capitalize’s partner network.
Membership fees are not disclosed until you’ve created a profile and Capitalize isn’t forthright about providing this information. We reached out twice but were told we can get the membership cost information only after we sign up. You’re not required to purchase a membership package, but it seems that — especially if you’re using a non-partner IRA provider — the free service takes a lot longer.
We like that Capitalize recognizes that not everyone knows where their old 401(k) is held and will do the work to locate it for you at no charge. They’ll even talk with your former employer on your behalf if necessary. It’s great that Capitalize handles the rollover process for its clients from start to finish.
Once you’re signed up, Capitalize walks you through choosing an IRA provider, which can be confusing if you’ve never had one. Based on factors such as your investment experience, risk tolerance and financial goals, Capitalize may steer you toward a self-directed IRA or an automated (robo-advisor) IRA. But ultimately, the decision is up to you and what you feel most comfortable with.
We also like the extensive educational information Capitalize has available on its website. Capitalize is clear about not being a financial advisor, tax expert or investment platform, but it does provide a ton of general information about different retirement accounts, IRAs and the providers that offer these services. And its FAQ section can answer some popular questions you may have as you navigate the rollover process.
While Capitalize seems to do its service well, it’s exclusively a 401(k) search and rollover service. Beyond that, it can’t give you any financial, investing or tax advice, which limits the platform. Also, it’s not set up to help you roll over an old 401(k) into your new employer’s 401(k) plan.
Another issue we found is the need for more communication methods. There is no phone number to call, so you are limited to email, which can take days to answer a simple question. All calls must be scheduled in advance. Users say it could take weeks to talk to an actual person, which can be frustrating.
Finally, the Capitalize website says that transfer time, depending on the 401(k) provider, can take “a few days to a few weeks.” However, many users report that it can take months to complete the process. While the longer transfer times are not necessarily the fault of Capitalize, it would seem prudent to disclose that the rollover process could, in reality, be quite lengthy.
Capitalize is a legitimate company founded in 2019. It clearly states that it is not qualified to give investment or tax advice and does not attempt to do so.
It’s not registered with the Securities and Exchange Commission ( SEC) and is not a member of the Financial Industry Regulatory Authority (FINRA), but it’s also not a brokerage firm and it does not hold any customer financial accounts. It merely promises to find and transfer the funds from your retirement account to an IRA, and it has done this successfully for many satisfied customers.
Capitalize has 4.8 out of five stars on Trustpilot based on 2,507 reviews as of May 2024, and 95% of those reviewers gave it a 5-star rating. Most complaints centered around communication issues or the whole process taking longer than anticipated. However, Capitalize contacts negative reviewers to try and resolve their issues.
Capitalize has a Better Business Bureau (BBB) page but is not BBB-accredited as of May 2024. One complaint on the page from January 2024 has so far gone unanswered. The complainant cites poor customer service and significant delays, among other issues, in completing the rollover process.
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Capitalize has a network of IRA provider partners. When you choose to roll over your 401(k) into an IRA from one of the “preferred partners,” Capitalize receives a referral fee.
Capitalize now also offers membership packages (at undisclosed fees) for customers who require additional benefits and services. These subscription services can also help expedite the rollover into an IRA that Capitalize doesn’t currently have a partnership with.
Capitalize has a large network of IRA providers, including Merrill Lynch, Betterment, SoFi, Robinhood, Wells Fargo, Vanguard and Fidelity, among others. But partners may change, so it’s best to view the list of current partner providers once you’re ready to begin the rollover.
Capitalize can help you roll over as many 401(k)s as you have, and it still doesn’t charge a service fee unless you upgrade to a membership package. And if you leave another job in the future, you can use Capitalize to facilitate that rollover as well, also for no charge.
In most cases, the rollover process is tax-free, but there are some exceptions, such as a Roth conversion.
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