For the past decade, mutual funds have dominated the investment menus of self-directed small business retirement plans. But if you want to "go where the growth is," offer small business owners in your market a self-directed brokerage option (SDBO).

These options are the equivalent of a brokerage account inside a participant-directed retirement plan. Cerulli Associates reports that about 15% of all 401(k) plans now include SDBOs. According to Charles Schwab, three-fourths of the new plans it has opened recently offer SDBOs, and the firm's total assets in these accounts now exceeds $5 billion.

Many large 401(k) plans have shied away from SDBOs due to their added recordkeeping cost (typically $50-100 per participant per year) and the perception that these options increase fiduciary risk and administrative complexity. But small businesses with 25 or fewer participants are a natural market for SDBOs, especially when key participants have diverse investment goals, along with a common desire to reduce costs.

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