As a part of our 401(k) offering with Slavic401k we now offer access to a self-directed brokerage account.
What is a self-directed brokerage account (SDBA)?
A self-directed brokerage account is an option through your 401(k) that allows you to invest in mutual funds, stocks, bonds, and ETFs that are outside of the investment options in the plan’s core lineup. Through the brokerage account you are able to invest in these funds while maintaining the tax advantages and benefits of the 401(k) account.
How do I sign up?
To sign up for the brokerage account you must first be enrolled in the Justworks Retirement Savings Plan through Slavic401k. For steps on how to enroll please visit our Help Center Article here.
If you are already enrolled in your plan on Slavic401k you can login to your account and on the participant portal go to the Manage tab and select Manage Investments from the drop down menu.
Then you can select Change Elections or Transfer Funds.
Change Elections will update where new contributions to your account are allocated. Funds already allocated will remain invested in your current elections. Transfer Funds will move your existing funds into a new election.
Either action or combination of the two can be used to open a the Fidelity Self-Directed Brokerage Account (FSDBA)
From there you will see the Fidelity Self-Directed Brokerage included in the list of investment options. The max amount you can allocate to this option is 95%.
Here you can elect the amount you would like allocated to each investment option, including the self-directed brokerage. You then will be asked to confirm your elections and read all notices and documentation. Once all the confirmations are complete you will receive an automated email with a link to complete the application for the brokerage account. This email will be the home email address that you have in your Slavic401k profile.
This application must be completed within 14 business days. If you do not complete this application your funds will be invested in the stable value or money market fund that is available.
Once your application is completed you will receive a confirmation email. Once your application is approved and your account is established you will receive another email with further instruction. When you initially transfer your funds to your Fidelity Self-Directed Brokerage account they will be automatically invested in the Fidelity Government Cash Reserves fund (FDRXX) where they will remain until you initiate and complete a trade. Once you have funded your account you will be able to set up automatic investments for any new funds that come into the account.
Justworks does not select or monitor the investments available in the brokerage account. If you have any questions regarding investments or would like guidance on how to structure your portfolio please contact our independent investment advisor, BKS Retirement Services. There are no additional fees for use of their services. To speak with an advisor call (800) 371-0232.
How does it work?
Once you have your SDBA set up you will be asked to register your Fidelity account and set up a username and password. Once set up, you will be able to login to your Fidelity account and trade in your account.
If you already have a Fidelity account your new Slavic401k brokerage account will appear in your dashboard.
You will be able to view your account balance and change your 401(k) allocation in your Slavic401k account but you will not be able to make trades in your brokerage account from Slavic401k. To make a trade you must login to your Fidelity account.
What if I want to take out a loan?
If you would like to take out a loan on your 401(k) and you have a Fidelity Self-Directed Brokerage account you must liquidate the positions in your brokerage account to generate enough cash to cover the loan and associated fees.
If you do not do this, those funds will not be available for you to borrow against. If you have any questions on this process please contact Slavic401k directly.
Is there a maximum to the amount that can be in the brokerage account?
You will be limited to 95% of your total portfolio being allocated to the brokerage account. This is not something that you will have to calculate and track, Slavic401k will automatically limit the amount that is transferred into the brokerage account.
Are there additional fees for the brokerage account?
There are no additional fees to utilize the brokerage account however, there will be transaction fees depending on the investments that you have selected. These transaction fees are one time fees to purchase or sell individual investments and vary depending on the type of investment and management company. The specifics of the fee will be disclosed at the time of the transaction and deducted directly from your brokerage account balance.
How will the partnership with Fidelity work?
Slavic401k offers a brokerage account that is run through Fidelity. Once your Fidelity account is set up, the two accounts will be linked -in Slavic401k you will be able to view your plan portfolio, investments outside of your brokerage account, and your brokerage account balance; in Fidelity you will be able to view details on your brokerage account including, investment performance, account balances, and transactions details.
Through your Fidelity brokerage account you will also have access to a variety of resources and educational materials to help you manage your account and investments.
Are there socially responsible funds or other specialty funds available in the brokerage account?
Yes, Fidelity offers these funds along with many other investment options. To research investments that you are interested in please visit Fidelity.com
Is there a deadline to sign up?
No, just like other investment options, the brokerage account can be taken advantage of at any time.
For more information opening a brokerage account or any other questions regarding your Slavic401k account please contact Slavic401k’s Customer Service team at 800-356-3009