While the Principal Group has offered self-directed services to participants since 1997, the agreement with Ameritrade provides new advantages for participants and plan sponsors.
The Principal Self-Directed Brokerage Account will allow participants to trade online in individual stocks and mutual funds. Participants also can access the service by automated voice response, and can trade bonds and treasuries through the trading desk at The Principal.
The service is expected to be available to Principal’s more than 7,000 plan sponsors and their 1.4 million participants beginning in April.
Accounts will be updated daily to reflect account information based on the prior day’s closing, as well as transactions and fund transfers
Participants will also have:
- the ability to transfer funds from core investments to the brokerage account in one day
- an unlimited number of trades.
Accounts can be funded by investments from either the employer or employee and there are no restrictions on the contribution level.
Participants will also be able to access a variety of investment tools, including online market research and brokerage positions.
For a fee of $750 per year, typically paid by the employer, retirement plan participants will have access to the brokerage services. Participants who use the service will pay an annual fee of $75, plus $25/trade.