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Subject:  Re: Self-directed in 401(k)? Date:  10/11/1997  10:27 AM
Author:  TMFPixy Number:  456 of 88775

Yo, Mike.

<<If you find any such animal as a self directed 401k, please post it. Maybe I can talk my employer into the same thing.>>

About five to seven percent of all 401k plans have a self-directed account option in which participants may select their own investments using the services of a broker. Your problem isn't so much finding another plan that allows this as it is convincing your employer through the plan's investment committee to allow it. These options are costly to provide, so employers are not eager to do so. That's particularly true when you consider the vast majority of employees would not use this option even if it was provided, either because of a lack of confidence in their ability or through a lack of understanding. While I have no hard data, I recall reading that over half of the plans permitting self-direction pass on all costs to the employee. Additionally, they do not use discount brokers as the trade agents. Thus, it could get costly to the participant.

If you want this option, then you must convince others in the plan to join you in a lobbying effort with your employer. Unless you and others ask for this loudly and continuously, I'll guarantee you it will never be offered. OTOH, if enough of you band together and insist on a self-directed option, in time your employer will comply with those wishes. It won't happen, though, if you're all by yourself in the request.

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