General Motors RSP New Fidelity Brokerage Option
As of January 23, 2025 participants in the GM Retirement Savings Plan (RSP 401k) have a new and potentially game changing investment option. The plan now allows participants to open a self directed 401k account through Fidelity (BrokerageLink®).
You might be asking what is a self directed 401k and why is this game changing?
A self-directed 401(k) is a retirement account that allows the account holder to expand their investment options by opening a brokerage account at a custodian such as Fidelity. This gives the account holder more control over their investments, but also requires a higher level of investment knowledge and time commitment.
Essentially, the self directed account expands the list of available investment options from the curtailed list of roughly 28 options. The participants that pursue this option will have access to all of the mutual funds available through the Fidelity FundsNetwork®.
The Fidelity FundsNetwork® has over 10,000 funds from hundreds of fund companies. This is certainly an improvement over the 28 options available on the current plan especially since 11 of those 28 options are target date funds and another five are Fidelity funds.
The other exciting factor for participants who elect the BrokerageLink® option is that they can have their financial advisor potentially manage the BrokerageLink® account. So now, instead of picking from a very limited investment menu by themselves, participants can hire their fiduciary advisor to choose funds from a list of over 10,000 funds.
In order to manage BrokerageLink® accounts, the advisor must already have a relationship with Fidelity’s registered investment advisor firm. Financial Strategies Group does have this relationship and is able to help our clients in establishing a BrokerageLink® account.
Unfortunately, at this time the PSP (personal savings plan) does not have the BrokerageLink® option. Hopefully, this will be added in time. Additionally, we would have loved to see ETFs (exchange traded funds) and individual stocks as eligible investment options on the BrokerageLink® accounts, but that is unfortunately not turned on at this time.
If you have any questions on this exciting new feature, please don’t hesitate to reach out.
Written by Brice Carter