Brokerage window

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Brokerage Window

The ability for an account holder to have control over at least some of the investments made on his/her IRA or 401(k). That is, either the account holder or a designated representative has the ability to make investments with the contributions made to the account. This increases the potential return on a retirement account, but also increases the risk associated with it. See also: Self-directed IRA.

Brokerage window.

A 401(k) account that permits its plan participants to buy and sell investments through a designated brokerage account is said to offer a brokerage window.

Any securities trades you authorize for your account are made through this brokerage account. Transaction fees are subtracted as those orders are executed.

References in periodicals archive ?
For example, a brokerage window may subject participants to additional costs; brokerage windows can be challenging for participants to use; the investments in the brokerage window generally do not have the same oversight by the plan sponsor as the investments in the 'core' fund lineup; and few people ever actually use a brokerage window," she says.
Summary paragraph: How to help limit the potential risks of brokerage windows
The report suggests that other flexibility-inducing options designed to prevent leakage, such as allowing brokerage windows or "sidecar IRAs" inside a DC plan, could undermine adoption of qualified default investment alternatives.
Under the DB-ization model, employers may find it appropriate to place limits on brokerage windows to protect employees' account balances.
Employee Benefits Security Administration (EBSA) backed off in late July on its controversial fiduciary requirements involving brokerage windows under its fee-disclosure rule 408(b)(2) that had the retirement planning community up in arms.
That's whether a broker-dealer would be able to properly identify the payer of indirect compensation in connection with brokerage windows.
Members of the AICPA's DOL Liaison Task Force will continue to work with the DOL as it conducts a review of this alternative reporting method for plans with brokerage windows in an effort to determine whether and under what circumstances such method of reporting may need to be modified to ensure adequate information is provided to plan sponsors, participants and beneficiaries, and the DOL, PBGC and IRS in the future.
How do you know if brokerage windows are a good choice for you?
Special disclosure rules for certain types of investments like brokerage windows, target-date funds, annuities and company stock
Summary paragraph: Brokerage windows in 401(k) plans
The Department of Labor's Employee Benefits Security Administration (EBSA) backed off on its controversial fiduciary requirements involving brokerage windows under its fee-disclosure rule 408(b)(2) that had the retirement planning community up in arms.
Plan sponsors must provide each participant or beneficiary with the following general plan information: The procedures for participants and beneficiaries to give investment instructions; any limitations on investment instructions, including restrictions on transfers to or from a designated investment alternative (DIA); a description of every DIA offered under the plan; a description of any plan provisions that relate to the exercise of voting, tender, and similar rights accompanying investment in a DIA; the plan's designated investment managers (if any); a description of any brokerage windows, self-directed brokerage accounts, or similar arrangements that allow participants to select investments beyond plan-designated investments.