The Overlooked Opportunity Inside Workplace Retirement Plans
Why Self‑Directed Brokerage Accounts Matter More Than Ever for Advisors
For decades, financial advisors have built strong relationships by helping clients manage IRAs, taxable accounts, and rollover assets after they leave an employer. Meanwhile, a significant, often the largest pool, of client wealth has quietly remained out of reach: assets inside workplace retirement plans.
That has begun to change.
Across thousands of 401(k), 403(b), and 457 plans, a feature exists that many advisors and most participants are still unaware of: the Self‑Directed Brokerage Account, commonly known as an SDBA or “brokerage window.”
For advisors looking to grow AUM, deepen client relationships, and deliver more holistic retirement advice, SDBAs represent one of the most underutilized opportunities in the market today.
What Is a Self‑Directed Brokerage Account?
A Self‑Directed Brokerage Account is an optional feature embedded within certain workplace retirement plans. It allows participants to invest their retirement assets beyond the plan’s core investment menu.
Instead of being limited to a small lineup of target‑date funds or curated mutual funds, participants with access to an SDBA may invest in a broad range of securities such as mutual funds, ETFs, and professionally managed strategies that are not otherwise available in the plan’s default lineup.
Crucially, SDBA assets remain inside the employer‑sponsored plan. The assets retain their tax‑advantaged status and do not require a rollover, distribution, or employment change.
How Common Are SDBAs in 401(k) Plans?
SDBAs are far more common than many advisors realize.
According to research cited by the ERISA Advisory Council, brokerage windows are offered in roughly one‑quarter of all defined contribution plans and in nearly half of large plans with more than 5,000 participants.
Despite that broad availability, participant usage remains low. Testimony collected by the Council shows that approximately 2 to 4 percent of plan assets are invested through SDBAs, with usage concentrated among higher‑balance and more engaged participants.
The gap is not access. The gap is awareness and guidance.
What the Data Shows About SDBA Participants
Recent data from Charles Schwab’s Self‑Directed Brokerage Account Indicators Report for quarter ending 12/31/2025 highlights the profile of typical SDBA users:
Average SDBA account balances exceeded $380,000 in 2025
Advised SDBA accounts averaged more than $580,000, compared to roughly $334,000 for non‑advised accounts
Investors using professional advice held nearly twice as many positions and exhibited more diversified allocations
These figures reinforce two critical points for advisors. First, SDBAs attract higher‑value retirement assets. Second, professional guidance plays an important role in how participants use these accounts.
Why SDBAs Matter to Financial Advisors
Access Workplace Retirement Assets While Clients Are Still Working
Self‑Directed Brokerage Accounts allow advisors to extend their advisory services into 401(k), 403(b), and 457 plans without waiting for a rollover event. Advisors can help clients manage significant retirement assets during their peak earning years.
Deliver More Comprehensive Retirement Advice
Clients rarely think of their retirement finances in account silos. Advisors who only manage assets outside workplace plans risk leaving major allocation and risk decisions uncoordinated. SDBAs allow advisors to incorporate in‑plan assets into a unified retirement strategy.
Differentiate Through Expertise, Not Products
Most participants receive limited support inside their workplace plans. Advisors who understand SDBAs can offer guidance that few competitors actively provide, positioning themselves as specialists in workplace retirement planning.
Grow AUM Without Competing for Rollovers
Rather than waiting for uncertain timing around job changes, SDBAs allow advisors to grow assets under management while strengthening long‑term client relationships.
Why Participants Benefit from Professional Management Inside Their 401(k)
Modern workplace plans are built for scale, compliance, and simplicity. They are not designed for personalization.
For participants with larger balances, evolving goals, or specific risk considerations, default investment menus may fall short. Professional management inside an SDBA can offer:
Customized money management aligned with a household’s full financial picture
Ongoing monitoring and portfolio discipline
Risk‑aware strategies beyond static target‑date funds
Access to professional management while keeping assets in‑plan
SDBAs help bridge the gap between workplace retirement plans and professional portfolio management.
Where Potomac Fits In
At Potomac, we believe advisors should be able to deliver a consistent investment approach across their clients’ entire retirement picture, including assets held inside workplace retirement plans.
Potomac’s SDBA solutions allow advisors to implement professionally managed strategies within brokerage windows offered by eligible 401(k), 403(b), and 457 plans, helping maintain alignment across held-away assets and external accounts.
Potomac also supports advisors through a compensation structure that does not require direct fee deductions from clients’ workplace retirement accounts, reinforcing alignment, simplicity, and transparency for both advisors and participants.
Our focus is helping advisors extend professional management to workplace retirement plan assets while participants are still working in a compliant, scalable, and client‑centric way.
Learn more here.
