Self-Directed Brokerage Account (BrokerageLink®) | Human Resources (2024)

FAQs

What is a self-directed brokerage account Fidelity? ›

Fidelity BrokerageLink® is a self-directed brokerage account that gives participants access to thousands of mutual funds from many different mutual fund companies.

When you open a self-directed brokerage account, you choose what you would like to invest in, as well as when you would like to buy, sell or trade investments in your portfolio.

Money directed to BrokerageLink is held in an account separate from your 403(b) or 457(b) Plan accounts. The minimum needed to open a BrokerageLink account is $2,500. To keep your account active, you must maintain at least $2,500 in your BrokerageLink account and $500 in your standard plan options at all times.

Fidelity's BrokerageLink® option is a self-directed brokerage account within the 401k or 403b plan.

There are no restrictions on how much you can invest in a brokerage account, and you can readily buy, sell, and trade for short-term or long-term potential gain. IRAs, on the other hand, have strict rules around when you can withdraw without penalty as well as how much you can contribute annually.

If you feel like you know what you're doing, self-directed investing might be a good option. If you're more of a novice or don't feel confident managing an investment portfolio, automating things is the better move.

Cost Savings: Managed portfolios often come with higher fees due to the involvement of professional money managers. In contrast, self-directed portfolios allow investors to avoid these additional fees and expenses, potentially resulting in cost savings over the long term.

If you wish to make a withdrawal from your BrokerageLink account, you must transfer those assets to a Vanguard Target Retirement Fund and/or a Core Mutual Fund. Once the transfer has been processed, you can request a withdrawal.

You can take penalty-free withdrawals if you left your former job at age 55 or older. Many offer institutionally priced (i.e., lower-cost) or unique investment options. Federal law provides broad protection against creditors.

What can you buy with Fidelity BrokerageLink? ›

With BrokerageLink, investors can buy and sell individual stocks, bonds, mutual funds, exchange-traded funds (ETFs), and more. This flexibility gives investors the ability to tailor their investment strategy to their specific needs and goals.

Through your Fidelity BrokerageLink account, you are unable to invest in Fidelity mutual funds and non-Fidelity mutual funds offered through the University of California Retirement Savings Program, tax-exempt securities, employer securities (includes all types of equities, e.g. common stock, preferred stock, ...

The only way to fund or make additional investments in a BrokerageLink® account is by a transfer of assets from your Plan. This can be accomplished online via NetBenefits® or by calling your Plan's toll-free telephone number during regular Plan hours, Monday through Friday.

Individuals looking to transfer funds need to initiate the process by contacting the administrator of their existing 401(k) plan. They can then request a direct rollover to BrokerageLink Fidelity, specifying the amount to be transferred.

Cost Savings: Managed portfolios often come with higher fees due to the involvement of professional money managers. In contrast, self-directed portfolios allow investors to avoid these additional fees and expenses, potentially resulting in cost savings over the long term.

Self-directed 401(k) investors can incorporate real estate assets and other non-traditional investments into their portfolios, which can potentially provide extraordinary earning opportunities. These options aren't available to regular 401(k) investors.