Brokerage window

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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

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.

Dictionary of Financial Terms. Copyright © 2008 Lightbulb Press, Inc. All Rights Reserved.
References in periodicals archive ?
As for the second question, while a brokerage window can provide access to a broad array of mutual funds or even individual securities, plan sponsors may point out that there are also drawbacks, Lucas says.
Company 401(k) retirement plans offer a core group of mutual funds, a collection of target date retirement funds but often a self-directed brokerage window as well.
Accordingly, committees need to watch brokerage window terms with respect to employer securities and consider employer security policies under a 401(k) plan offering self-directed brokerage accounts.
16 October 2014 -- German financial services firm Deutsche Bank (NYSE: DB) and Fidelity Investments said they have teamed to provide 401(k) retirement plan professionally managed account services and a self-directed brokerage window option to the bank's 22,000 plan participants including active employees and retirees.
Brokerage Windows. A brokerage window allows employees to direct their investments beyond the portfolio selected by the plan sponsor.
30 of the FAB as originally drafted, she says, "including requirements that a plan must have 'a manageable number of investment alternatives,' monitor for 'significant investment through a brokerage window' and provide participant disclosures for any investment selected through a brokerage window by at least 1% of participants to qualify for the safe harbor test."
That's whether a broker-dealer would be able to properly identify the payer of indirect compensation in connection with brokerage windows. While the provider of the brokerage window is supposed to disclose indirect compensation through several types of investments that plan participants can make, the provider will not know up front which of those investments a participant will choose.
In Hecker, the courts said Erisa does not require plans to disclose revenue sharing and rejected the argument that the investments were too expensive, noting participants could access more than 2,500 mutual funds through the plan's brokerage window.
Nearly 20% of 401(k) plans now offer a "brokerage window," or account, to participants, according to research firm Hewitt Associates.
In addition, plan auditors may experience difficulty in obtaining brokerage window investment information by individual investment categories (common stocks, mutual funds, employer securities, etc.) and brokerage window investment income earned by account type from plan service providers.
These independent-minded investors prefer to allocate their capital through a brokerage window offered in their plan alongside the conventional fund menu.