One of the best ways to save for retirement is through a 401(k) plan. But what if you’re looking for more options than the “plain vanilla” investments in your 401(k)? Well, you might want to consider setting up a Self-Directed Brokerage Account (SDBA). In this blog post, we’ll explain exactly what an SDBA is, how to determine if your company offers one, and why an SDBA might be right for you. Let’s get started!


What Is a Self-Directed Brokerage Account?

A Self-Directed Brokerage Account (SDBA) is an account that allows you to invest in stocks, bonds, mutual funds, exchange-traded funds (ETFs), and other investment products outside of the typical “plain vanilla” investments offered within your 401(k). This means that instead of being limited to a handful of predetermined investments within your employer’s plan, you now have access to thousands of additional investments. In addition, an SDBA allows you to work with experienced investment professionals to set up, monitor, and maintain your investment portfolio, all within your existing 401(k) plan. With an SDBA, you have greater flexibility and control over your retirement savings.


How Do I Know If My Company Offers an SDBA Option?

The best way to find out if your company offers an SDBA option is by speaking with someone in Human Resources or checking with your employer’s retirement plan administrator. Usually the administrator will have information about whether or not the company offers an SDBA option. It’s also important to note that not all employers offer this option; however, it is becoming increasingly common. For example, the following employers (and many more!) in Virginia offer a Self-Directed Brokerage Account in their 401(k) plan:

    • Virginia Retirement System
    • Hundreds of City, County, and State 457 Plans
    • Apple
    • AOL
    • Booz Allen
    • BAE Systems
    • BB&T
    • Bon Secours
    • Capital One
    • Danaher
    • Eastman Chemical
    • General Dynamics
    • Hilton Hotels
    • Home Depot
    • Huntington Ingalls
    • James Madison University
    • Lockheed Martin
    • Marshall University
    • Merck
    • Mercy Health
    • Oracle
    • Northrop Grumman
    • Sentara
    • University of Virginia
    • United Parcel Service
    • Whole Foods

Benefits of an SDBA

The key benefit of having a self-directed brokerage account is that it provides much more flexibility and control when investing than traditional 401(k) plans do. Additionally, they allow you access to a much wider range of investments such as stocks and bonds as well as international funds and ETFs which may not be available in traditional 401(k) plans. This additional flexibility gives you the ability to work with an investment professional at James River Advisors to set up, monitor, and actively manage your own portfolio, which can reduce volatility and help maximize returns over time.


A Self-Directed Brokerage Account (SDBA) can provide retirement savers with greater flexibility when investing their retirement money than traditional 401(k) plans do. As such, many employers are offering them as part of their retirement packages. To find out if yours does too, simply check with Human Resources or the retirement plan administrator at your workplace. Ultimately, whether or not an SDBA is right for you depends on whether you have the time and knowledge to feel comfortable managing your own retirement investments, or if you’d like help from an experienced professional—but it could be worth considering! Contact James River Advisors today for a free consultation. Contact Us

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