A self-directed brokerage account is the most underrated investment option in a 401(k) plan. That’s assuming, of course, it’s even made available to the employee.

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The benefit of a brokerage window is that it can provide a participant more choices and better control than the limited options on their 401(k) plans. However, let’s be clear that the brokerage window isn’t for everyone.

For individuals who have investment experience, the brokerage option offers the opportunity to fine-tune an asset-allocation strategy. In the hands of the right people, it can be a very cost-effective and precise way to manage retirement money.

Brokerage windows enable investors to choose from thousands of investment options. But the sheer numbers can make it more difficult for inexperienced investors to choose suitable investments.

In short, the self-directed brokerage option gives an investor access to a broad range of investment by way of a brokerage account versus the limited lineup offered by a 401(k) plan. It offers all the same benefits, including tax deferral and the convenience of making contributions through payroll deductions.

Self-directed brokerage accounts were popular in the 1990s, and today about 20 percent of employers offer it as an option. However, popularity has grown over the years, opening new possibilities as to how someone can invest his or her 401(k).

Only an employer’s plan administrator can make self-directed brokerage available to an employee. If available, it can be found by accessing the account online. However, I urge employees interested in a self-directed brokerage account to reach out to their human resources department to know for sure if this option is available.

The brokerage window offers more flexibility by gaining access to a universe of investment options but may expose investors to risks and fees they are not used to. It’s for this reason that individuals should consider consulting with a 401(k) provider and/or financial advisor before making any investment decisions.

Meanwhile, the Department of Labor continues to criticize the brokerage account window, because studies show that larger numbers of investment choices confuse most participants. In addition, minimal guidance on selecting suitable investments is offered.

The Department of Labor’s solution is to make the self-directed option more burdensome and expensive for the employer in anticipation that they’ll drop it from their plans.