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
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.
. 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.