Confident enough in a single stock to let your entire retirement nest egg ride on it?

As foolhardy as that may seem, a handful of 401(k) plans will now let you do just that. These so-called brokerage windows, or self-directed 401(k) options, are now available in 11% of all 401(k) plans, up from zero percent in 1993, according to

Spectrem Group

. And some of the biggest 401(k) providers are now offering brokerage windows --

Fidelity, Vanguard, Putnam, MFS



among them.

Brokerage windows let a 401(k) investor place money in almost any mutual fund, stock or bond. Some employers are including these options to expand their plan's mutual fund offerings without having to go to the expense or trouble of actually expanding the number of funds in their plan, says Stacy Schaus, a principal with

Hewitt Associates

, which administers 200 401(k) plans.

But most 401(k) sponsors are offering brokerage windows because employees -- particularly at the executive level at such professional organizations as law firms and hospitals -- want to invest at least some of their 401(k) money directly in stocks, Schaus says.

For the most part, only 5% of plan participants who have this option are taking advantage of it, and they typically place no more than one-quarter of their money directly into stocks, according to Spectrem. In fact, most of the 401(k) brokerage windows would never permit people to put 100% of their retirement savings in a single stock. Many limit these investments to no more than 20% to 50% of a person's 401(k) savings, and all are coupled with lengthy risk-tolerance questionnaires and education, according to Spectrem.

But financial planners and the

Pension Rights Center

, a pension and defined-contribution watchdog group, say that letting investors place any amount of their retirement savings directly into stocks is potentially reckless.

What if, for example, following the intoxicating tech run-up of 1999, a 401(k) investor had put his or her account in



? That account would have decreased 54% in value in year 2000. Or in

(AMZN) - Get Report

, which plummeted 79.6% last year?

Investors with overly concentrated portfolios, especially in individual stocks, could jeopardize their retirement, according to the Pension Rights Center. Also, unlike a traditional 401(k) plan, which offers a worker some legal protection because it requires employers to select investment options in employees' best interest, some self-directed brokerage plans ask investors to sign waivers to take full responsibility for their investment decisions, the center warns.

Percy Bolton, a financial planner in Los Angeles, thinks investing in individual stocks has no place in 401(k) plans. "Retirement accounts should be diversified appropriately and invested conservatively," he says.

Persumma Financial

, a new 401(k) provider founded in 1999 as a subsidiary of


, partnered with


just last month to offer self-directed brokerage windows. Spencer Williams, Persumma's CEO, maintains there is a "certain percentage of the market that's savvy and confident" that wants this.

The Profit Sharing/401(k) Council of America

, which represents leading corporations with 401(k) plans, also believes that offering 401(k) brokerage windows is a trend that will continue because of employee demand. "Sophisticated investors are asking for more 401(k) options, and companies are giving them this to maintain good employee relationships," says David Wray, the council's president.

Besides the inherent risks of 401(k) brokerage windows, investors should also take note that it's generally as expensive to trade in such windows as it is in regular brokerage accounts. Brokerages generally charge $8 to $30 per market order. Also, to make up for lost revenue from annual mutual fund fees, the plan provider and sometimes even the employer will impose setup fees of $50 to $100, plus additional maintenance fees of $100 to $400 a year.

Just who are these investors who are taking the plunge? Executives at Fidelity,


and Hewitt say they are all over the map -- both highly paid executives, some of whom have $1 million in their 401(k) stock brokerage account, as well as average, middle-income workers.

Dan Bernard, director of institutional brokerage services at


, thinks that the percentage of companies offering this investment option will increase to as high as 40%, but that the participation levels will never rise above 25% because of the general lack of comfort with, and knowledge about, the stock market.

And just how well are these investors doing? Unfortunately, no brokerage, 401(k) provider or consulting group fesses up with performance data.

Harold Evensky, a financial planner in Coral Gables, Fla., guesses this information is being withheld for a reason. "I think that, ultimately, these people are just going to shoot themselves in the foot," Evensky says.