A lesser-known option that may be available to you through your current employer plan is called a Self-Directed Brokerage Account ("SDBA"). The traditional stock options that you are presented with as a benefits-eligible employee may not be the "only way" to choose your investments for that particular account. A SDBA is often described as a doorway to expanded investment options, with active management managers for another level of account customization.
To find out if your employer allows its employees to participate in a SDBA, contact your HR department or plan sponsor.
To learn more about the basics of the Self-Directed Brokerage Account and how it works, watch this 2-minute video below:
What is a Self-Directed Brokerage Account (SDBA)?
A SDBA, or Self-Directed Brokerage Account, is a window inside a company-sponsored retirement plan (401(k), 403(b), 457, etc.) that you currently participate in.
This structure offers plan participants the option to invest in additional investments other than the traditional, pre-selected company choices.
How do I find out if my current employer plan allows an SBDA?
You'll want to contact your plan sponsor or HR administrator to inquire further. If an SDBA is allowed, you'll also want to find out what percentage of your portfolio can be restructured.
Not all companies allow for an SDBA model so it's important you check with your current employer.
How does an SDBA offer me different options than what I have?
Access to professional money management and additional investment options like stocks, bonds, mutual funds, ETFs, etc., allows investors to seek growth through guidance.
By investing in additional options outside of the core choices, investors can strive to maximize returns through investments better suited to their goals and risk preference.
How is a SDBA account monitored and when are changes made?
Your SBDA account is managed with the help of a stoploss risk management tool with the HCM-BuyLine®1, a mathematical, quantitative indicator.
The HCM-BuyLine® signals when it thinks you may want to enter and exit the market based on its proprietary algorithms.
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1 All investments are subject to risks similar to those of stocks. Investment returns will fluctuate and are subject to market volatility, so that an investor’s shares when redeemed may be worth more or less than their original costs. There are unique potential risks associated with the specific asset classes that a Mutual Fund or ETF represents. You should carefully consider the risk, charges, and expenses of an ETF prior to investing. There can be no guarantee that the HCM-BuyLine® indicator will perform as anticipated. Stoploss protection will not necessarily limit your losses to the desired amounts due to the limitations of the HCM-BuyLine®, market conditions, and delays in executing orders. It is not an actual stoploss order that automatically sells securities in the portfolio at a certain price. There can be no guarantee that the HCM-BuyLine® indicator will perform as anticipated. Stoploss protection will not necessarily limit your losses to the desired amounts due to the limitations of the HCM-BuyLine®, market conditions, and delays in executing orders. It is not an actual stoploss order that automatically sells securities in the portfolio at a certain price. Howard Capital Management is an independent third-party and has no affiliation with Cetera Advisors LLC or any other named entity.