09-23-2013, 09:59 AM
Hello cannew and welcome to the forum -- quite an entrance!
In the US this is up to the employer and the 401k plan administrator. They can certainly set up a "self-directed" option that allows employees to set up a brokerage account within the 401k to buy individual securities. I'm not sure how rare or common this is. It is not something I have ever been offered. I suggested it once at my old company and was told that they were against it to "save people from themselves." I guess the notion is that your average employee is not too savvy about investing, and it is better to only give them "safe" options (low-cost mutual funds, with an emphasis on passive index funds) and not let them "gamble" in individual stocks. Seemed like a pretty paternalistic approach to me...
(09-22-2013, 06:00 PM)cannew Wrote: In Canada there is no such Mutual fund restriction in the registered accounts. Between my wife and I we hold 22 individual stocks.
In the US this is up to the employer and the 401k plan administrator. They can certainly set up a "self-directed" option that allows employees to set up a brokerage account within the 401k to buy individual securities. I'm not sure how rare or common this is. It is not something I have ever been offered. I suggested it once at my old company and was told that they were against it to "save people from themselves." I guess the notion is that your average employee is not too savvy about investing, and it is better to only give them "safe" options (low-cost mutual funds, with an emphasis on passive index funds) and not let them "gamble" in individual stocks. Seemed like a pretty paternalistic approach to me...