Keep The Course: Do You Want More Investment Options In Your 401k Plan?

Each Wednesday 401kBasics posts a new article in a weekly series called “Keep the Course”. This series is designed to give the average consumer information on how to keep their 401k plan on track! Your feedback or suggestions on future articles is welcome.

The typical 401k plan provides you with a selection of mutual funds to invest in. What if you wanted to invest in something else? Perhaps a specific stock, bond, or publicly traded mutual fund? The answer to this is to ask your 401k service provider if you can open a Self-Managed Brokerage Account (SMBA).

This is an option that some 401k plans have available. The idea behind it is to allow you to transfer an amount to the SMBA, and then through that SMBA you have thousands of investment options. Like any option, there are of course pros and cons:


  • You’re given more investment options and no longer limited by what your company selected for you.
  • Returns could be better, should you select profitable investments.


  • Your service provider may charge you a monthly or quarterly fee to maintain the account. There are typically trading fees to purchase and sell investments within the SMBA.
  • As the participant, you’ll be taking on more investment responsibility.
  • You’ll have to use which ever brokerage house that your company selects.

A few things to be aware of with the SMBA, is that there are usually minimum balance requirements to open the account, and when processing subsequent transfers into it. While not all 401k plans offer this investment option, it is a growing trend and may be available in your own 401k plan!

This site is for entertainment purposes only. 401kBasics and it’s authors are not financial advisors and no information found on this site should be construed as financial advice.

This entry was posted in Participant Guidance and tagged , , . Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s