Solo 401k TPA working with an advisor

[Jim White, CFP, EA]

Here's the situation. I'm a fee-only financial advisor who has a few small business owners, mostly individuals, as clients. These clients would benefit greatly from opening Solo 401(k)'s.  They want to max out the contribution limit, with the 25% profit sharing, and would like the ability to make after-tax contributions. The custodian I use has a Basic Document but it does not allow after-tax contributions. The custodian said to open a trust and create the plan document myself.

Yes I'm a CFP® and EA, and I'm smart enough to know I have no business creating plan documents myself. I see a business opportunity to provide the after-tax options to clients, but cannot do it myself. Can anyone recommend a TPA that can work with an advisor to provide a Solo 401(k) in a cost effective manner? That seems to be the problem. We've attempted to work with a few TPA's but the cost to this just to add the after-tax option, made the client say the heck with this we'll just use the custodians simple basic plan document and forget the after-tax option. Even if you explain the long-term tax benefits, they usually shy away. Again, I see the need for a niche here, but need help.

[CuseFan]

We've set up a few of these with advisors - our VS documents allow for after-tax voluntary contributions. Is the intent to distribute after-tax amounts annually and roll into a Roth IRA?  Because that will incur annual distribution processing and reporting fees in addition to normal annual administration. 

[Jim White, CFP, EA]

Eventually but no need to do it annually. The client is OK rolling the after-tax portion to a Roth at the plan termination when he retires.

[Doug Hileman]

We've done many of these. $500 setup and includes after tax, Roth and in plan Roth conversions. Contact me if you are interested.

dhileman@hilemanassoc.com

[Amyrmaid]

I suggest that you tack on a simple amendment to expand the amounts available to include voluntary contributions.  It is quite likely that your custodians 2020 post-PPA document will be expanded to include voluntary contributions since this has become a big financial planning trick in the one man plan arena.