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Self Directed Brokerage Accounts

Self-Directed Brokerage Account (SDBA)

Self-Directed Brokerage Account (SDBA)

More Choice, More Flexibilty

Over the past few years many employers have enhanced their retirement plans to include a Self-Directed Brokerage Account (SDBA) so that plan participants have more choice and greater flexibility with their retirement investments.  This option can be found in many 401(k), 401(a), 403(b), and 457 workplace retirement accounts.

The three primary benefits of activating the SDBA in your workplace retirement account and working with your local investment professional are:

Broader range of investment options

While the core account is designed to offer something for everyone, investment options are often generic and only offer a passive buy and hold approach.

Risk assessment and alignment

Over time and as assets accumulate, an investor's risk tolerance changes the closer they get to retirement.  Without an advisor's assistance, allocations often remain stagnant.

Advisory Services

Getting help as early as possible to establish healthy habits and a disciplined approach on workplace retirement accounts is essential to retire on time and with enough money.

Retirement Plan Investors Who Work With Advisors See Bigger Balances

Retirement Plan Investors Who Work With Advisors See Bigger Balances

According to Schwab's study1 Self Directed Brokerage Account (SDBA) participants who worked with an advisor had an average balance of nearly twice as much as accounts held by non-advised participants.  The SDBA allows investors to invest outside the plan's investment offerings, and put their money into any mutual fund, exchange-traded fund, stock or bond they choose.

Sources" *Schwab Self Directed Brokerage Account Indicators, Schwab Research, 9/30/2019

Advice Matters.

Advice Matters.

Recent studies emphasize the importance of client-advisor conversations.  These reports support that with the help of their advisors, investors could potentially add 3% to their net returns1 and retirement savers who sought investment advice enjoyed a median annual return almost 3% higher that those who didn't - even after the fees they paid for that advice2


1According to Vanguard's study based on their Alpha framework.  Putting a value on your value: Quantifying Vanguard Advisor's Alpha, Vanguard Research, 2016  2According to the study by Aon Hewittand Financial Engines.  Help in Defined Contribution Plans: 2006 through 2012.  3According to Russell Investments annual Study.  Why Advisors Have Never Been So Valuable, 2017 Value of an Advisor Study.

More Choice, More Flexibility, Access to Advice

Many employers have added a Self-Directed Brokerage Account (SBA) option to their 401(k), 403(b), and 457 retirement plans.  This option gives more choice and greater flexibility by opening up a larger universe of stocks, bonds, mutual funds, and ETFs. Most importantly, the SDBA option gives access to financial advice and professional management that plan participants wan and need on arguably their largest asset going into retirement.

The SDBA option should be used by investors who feel comfortable managing their own risk or are working with a professional Investment Advisor.

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