Tell Me About Fidelity's BrokerageLink Account

[Qs Laptop]

My wife got a new job recently and her 401k plan has limited choices, basically Target Date funds, index funds and some lousy equity funds. Fidelity is the administrator. For now, I've got all her money going into the S&P500 index fund.

When I logged onto her account I see there is an option to open a Fidelity BrokerageLink account, which apparently will open up a whole universe of investment options. For example, any Fidelity mutual fund is available with no commission, no fees. In fact, I think any Fidelity product has no fees or commissions (unless you have a phone representative make the trade for you.) It looks like she can have her payroll deductions sent directly into the BrokerageLink account.

There is an FAQ page and a commissions schedule to look at online, which I can study, but I'm looking to get ER.org's quick take on it.

Has anybody used Fidelity's BrokerageLink Account? What do you like about it and not like about it?

 

[Mark1]

My 401K is through Fido and has the Brokerage Link option. Although, my 401K fund selection is limited (~20 to 30 funds), I only use the brokerage link to buy brokerage CDs through Fido. It works fine and has no hidden fees, etc. I've had no issues to date.

To/from moves from 401K only occur at closing of the market each day, so if you want money, you need to move it the day before.

It also lets you choose, the money source (company contributions, employee contributions, etc.), but since I rolled out the post tax money into Roth IRAs it doesn't really matter since all my money is taxable when it comes out. Therefore, I just let it go to the default for the source.

 

[tulak]

I had a BrokerageLink account in the past.

The downside is transferring between the 401k and BrokerageLink account. You might also be limited in what you can buy in the BrokerageLink account, but you’ll still have a lot more options.

I have the option with my current 401k, but don’t use it. The 401k has good core funds that I use. For other investments, such as treasuries/CDs/etc, I use an IRA that I rolled over from an old 401k.

The only reason I’d use a BrokerageLink account is if the core funds were bad or I didn’t have other accounts to buy investments not available in the 401k.

 

[Markola]

My employer restricted what I could buy in Brokeragelink to a few disappointing, plain vanilla funds. In hindsight, I should have asked someone in HR what was available to me there before bothering with the set up.