Capitalize review

What is Capitalize?

Capitalize is a 401(k) rollover service that helps you transfer funds from an old 401(k) into a new individual retirement account (IRA). The service is geared towards those with legacy 401(k)s from past employers. These accounts may sit untouched for years, accruing fees and losing capital. Capitalize helps you move your money into an account you can freely access, like an IRA.
If you don’t already hold an IRA, Capitalize suggests an account with one of its partner platforms, like Betterment or SoFi. If you already have an IRA under your belt, you simply link your account and Capitalize takes care of the rest.
The service is free to use and the signup process can be completed in minutes.

How does it work?

Here’s what to expect of the Capitalize rollover process:

1. Locate your 401(k). If you know where your old 401(k) is sitting — great! If not, Capitalize helps you locate it through its existing database. And if that fails, its team tracks the account down on your behalf.
2. Choose an IRA provider. Capitalize helps you determine the ideal platform for your new IRA by comparing fees and features of various partners.
3. Open an IRA. Complete the account application process with the provider of your choice. If you already hold an IRA, this is your opportunity to link your account.
4. Roll over your 401(k). Capitalize fully handles the final step in the rollover process. Funds from your old 401(k) are transferred to your new IRA.

Is Capitalize legit?

It’s tough to gauge the legitimacy of Capitalize as it has no Better Business Bureau (BBB) page or parent company. It isn’t a member of FINRA or the SIPC, and it states on its website that it’s not qualified to provide investment or tax advice. Its founders have investment banking experience with large financial institutions like J.P. Morgan and Morgan Stanley, but don’t appear to be registered financial advisers.
Are your accounts safe with Capitalize? It’s hard to say. Customer feedback is favorable and Capitalize doesn’t actually hold your accounts — it simply helps facilitate the rollover process. Since you don’t pay for the service, you have little to lose, but a lack of overall feedback on the platform means you might want to carefully scrutinize Capitalize’s Terms and Conditions before you sign up.

How does it make money?

Capitalize has partnership agreements with the IRA providers it suggests through its website. If you open an account with one of its partners, that provider pays Capitalize a referral fee.

Capitalize fees

Capitalize’s 401(k) rollover service is entirely free. It has no premium service tier, and you can use its service as many times as you’d like.
However, there may be fees associated with the IRA you open during the rollover process, but these fees come from the IRA provider — not Capitalize.

How do I sign up?

The Capitalize signup process starts on its homepage:

1. Select Get Started.
2. Tell Capitalize which provider holds your old 401(k) or use the locator tool to search for your old employer by name.
3. Indicate whether you’d like to open a new IRA or roll your old 401(k) into an existing IRA.
4. Choose your IRA provider from the list provided or select Help me pick one.
5. Answer some questions about your investments and preferences, including how much money is in your old 401(k) and select Next.
6. Review Capitalize’s options and choose a provider if you don’t already have an existing IRA.
7. Enter your email address and create a password.
8. Review Capitalize’s User Agreement, Terms & Conditions, E-Sign Agreement and Privacy Policy. Select Next.
9. Verify your email address by entering the code sent to your inbox.
10. Complete the IRA account opening process with the provider you selected.
11. Enter your IRA account number and authorize the rollover of your existing 401(k) into your new account.

Pros and cons

Capitalize reviews and complaints

Overall, Capitalize feedback is positive. It lacks a BBB page but maintains a TrustScore of 4.7 out of 5 based on 23 customer reviews as of October 2020. And there are no complaints against Capitalize on the Consumer Financial Protection Bureau.
Other than feedback left for Capitalize on Trustpilot, there aren’t many customer experiences to draw from, and there are no Reddit threads that mention the service. That said, the platform’s glowing Trustpilot reputation is encouraging, bolstered by customer reports of concierge-like service and competent, friendly company reps.

Bottom line

Capitalize’s 401(k) rollover service is free to use and easy to navigate, but the company’s new and there’s limited customer feedback to review. Capitalize’s partners are well-established within the industry, but take some time to review your account options across multiple providers before deciding.

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