The most overlooked 401(k) feature almost no one uses:
The SDBA (self-directed brokerage account).
Back in July 1999, a long-time client of mine.
Whose after-tax brokerage account I was advising.
Asked me a question that changed my entire investment advice career:
“Can you help me with the mutual funds inside my 401(k) too?”
I dug into his 401(k) plan and discovered something I’d had not seen before:
The Self?Directed Brokerage Account (SDBA).
Hidden inside his 401(k).
Not promoted by his company Human Resources or his 401(k) provider.
The 401(k) SDBA opens the door to far more investment choices.
Than the standard default 401(k) mutual fund lineup.
Individual stocks, ETFs, and a broader range of mutual funds.
All options available in a 401(k) SDBA.
Even more important to existing investment advice clients:
It allows an independent, third-party investment advisor.
To provide investment advice on “held?away” 401(k) assets.
The same as regular accounts after-tax brokerage accounts.
I use the SDBA account option often with my 401(k) advice clients.
Here’s the part most individual 401(k) investors don’t know:
• Over 100,000 U.S. retirement plans offer an SDBA.
• Only 3%–4% of 401(k) participants use it.
Ever thought your 401(k) is too confusing and limiting?
If your 401(k) offers an SDBA option, I’ll walk you through it.
P.S. I can walk you through how and SDBA would work in your 401(k).
