Bad Bet for Self Directed Brokerage Accounts
Are self-directed brokerage accounts a bad bet to place? 401(k) plans with self-directed brokerage accounts that allow participants to choose almost any type of investment is another form of gambling and a plan sponsor may unknowingly expose themselves to liability by offering this feature when plan participants “crap out”. This article is about the hidden dangers of 401(k) plans in offering self-directed brokerage accounts to plan participants. Source: Jdspura.com
Key Article Quotation(s): “Plan fiduciaries must decide whether it is prudent to offer brokerage accounts to participants and if they do so, whether they should limit the type of investments allowed under these accounts. They must decide whether the participants have the background to make intelligent buy-and sell decisions about individual stocks. If they do not, offering brokerage accounts in a 401(k) plan could be a breach of fiduciary duty.”
Click here to read more