The Charles Schwab Corporation ( NYSE: SCHW) and Employee Fiduciary Corporation are both American-owned companies that provide 401(k) plans. The regulations concerning 401(k) plans are the same for all companies regardless of size, so when analyzing each company, it is important to view the company as a whole, comparing the funds that are offered as well as the particular features.

Company Structures

The Charles Schwab Corporation provides services in four departments: investment, banking, trading and wealth management. As of 2018, the company handles $3.362 trillion in client assets, 10.8 million brokerage accounts, 1.5 million corporate retirement plan participants and 1 million banking accounts. There are more than 345 Charles Schwab branches in the United States, employing approximately 1,800 financial consultants. These consultants have provided over 100,000 financial plans and enrolled $345 billion in advisory solutions as of 2018.

The Employee Fiduciary Corporation is 100% owned by the employees and focuses solely on retirement plans. As of 2018, Employee Fiduciary offers more than 30,000 mutual funds, services over 2,700 plans that are worth more than $2.8 billion, and covers approximately 75,000 clients. Each month, Employee Fiduciary processes $17 million in plan contributions and completes more than 500 distributions for participants.

The 401(k) plan is an employee benefit that is attractive for a company to offer and one that small business owners often struggle to provide. The regulations are strict, and it takes a devoted staff to ensure that employees are receiving the proper amounts. Often, small businesses do not have the ability to provide dedicated staff, so they must choose retirement providers that offer assistance in monitoring the application of the 401(k) plans.

Comparing the Funds

As of 2018, Charles Schwab offers two approaches to 401(k) plans: a comprehensive plan in which Charles Schwab is the record-keeper for plans with upwards of $20 million in assets, or an independent provider plan in which Schwab Retirement Business Services works with independent record-keepers to support retirement plans of all sizes and types. Employee Fiduciary is a smaller corporation and focuses on providing 401(k) plans for small businesses through 377 funds.

Charles Schwab's main strength is its ability to reach a broad range of clients with many unique needs. Charles Schwab provides more than just retirement services, as wealth management is a large portion of the company. This could be attractive to larger businesses that want the ability to minimize the number of providers with which they would work. The way that Charles Schwab handles 401(k) plans is a major strength for the company, as it can handle large firms as well as small businesses.

Employee Fiduciary is a small business compared to Charles Schwab. As of 2018, Employee Fiduciary had 54 full-time employees, while Charles Schwab employed over 17,500. The size of the company, as well as the fact that it only provides retirement plans to small businesses, means that it can cater to its clients in a more personal manner. Since it is a small business, the employees are well versed in the specific needs of other small businesses and are well equipped to provide advice. This strength is also a weakness, however, as Employee Fiduciary is in a niche market. The small stature means it is unable to provide services to large businesses. It also is limited to just 401(k) retirement plans, while Charles Schwab offers investment advice, trading, banking and wealth management.


Both companies provide reference material that allows a client to understand the various 401(k) plans available, as well as how his funds will be managed. Each company offers telephonic and digital services. The Charles Schwab website offers more tools to help the client make an educated decision, including IRA calculators, while the Employee Fiduciary website refers the client to third-party sites for the same calculations.

When it comes down to comparing the two companies, it is up to the individual needs of the client. Clients should feel comfortable with their retirement provider and how their money is being managed.