Your 403(b) retirement plan is innovative because it offers you choices for planning your retirement. But when you look more closely at your employer-sponsored retirement plan, you may discover the illusion of choice—you may be able to choose where and how to direct your savings, but the range of investment options you must choose from are often limited.
Add to this problem that many of these options are poor to begin with—overexposed to risky sectors, rife with conflicts of interest, and returns that are too closely aligned to offer any diversification benefits.
If your 403(b) investment menu happens to include a small-cap, high-yield or other type of specialty fund, you probably get only one of these options. You have to take whatever investment options the plan offers—which is not really much of a choice.
The biggest risk a limited investment menu poses is the inability to control your destiny—you may be unable to manage your retirement savings in a way that suits your risk tolerance. The only choice you really have is to sit back and take what the market offers—the good, the bad, and worst of all, the really, really ugly in the form of catastrophic losses.
Unleash Your 403(b)
What is BrokerageLink®?
Source: Fidelity Investments. “An advisor’s guide to Fidelity BrokerageLink®”, 2017.
Get started with BrokerageLink®
There are three simple steps to follow to start working with a financial advisor through Fidelity BrokerageLink®:
- Determine if your 403(b) plan will allow a financial advisor to help you: First you need to determine if your plan allows for advisor access and offers BrokerageLink®. To research this you can either call your Fidelity plan service center or provide your financial advisor a recent account statement.
- Completing the application process:
- The BrokerageLink® Application: You can register for an account online through your NetBenefits® login or complete an application in the BrokerageLink® kit. A financial advisor can walk you through this process to make sure it’s done correctly.
- Secure account access for third-party management by completing a few simple forms—In order to allow a financial advisor to manage your 403(b) account you will need to complete the Fidelity Registered Investment Advisor Authorization Form, the Registered Investment Advisor BrokerageLink® Authorization Form and any formal agreements required by your financial advisor. It’s 2018 so this should be able to be done electronically using DocuSign.
- Relax and let your advisor take it from here: Your advisor will work with you to determine the best investment strategy and take over the day to day responsibilities of managing your account.
What to Expect with Your New BrokerageLink® Account
Once you have your newly established BrokerageLink® account you will notice a few small changes. Not to worry, however, because your 403(b) account can still be accessed with the same NetBenefits login you have always used. Your financial advisor may also provide a client portal that will have a more in-depth account review including account and position level performance.
Not only will you see your total account value, but you will now have an asset titled “BrokerageLink” that will be the bulk of your account value.
Here are some helpful tips to keep in mind…
- A small portion of funds will be left on the plan side to cover any fees.
- Your plan will dictate how much money is allowed into BrokerageLink®, which in our experience is typically 90-100% of your account value.
- Your investment advisor will be able to handle moving the funds between your 403(b) account and the Brokeragelink® window as well as directing future contributions to be invested accordingly.
To see what funds you own in that BrokerageLink® window, you simply click on the BrokerageLink® asset listed and it will show you the fund allocations within your portfolio. You will continue to receive quarterly statements for your 403(b) account but in addition you will also receive monthly statements directly from Fidelity BrokerageLink®.