BOSTON ( TheStreet) -- A common complaint about 401(k) plans is that their investment options can be limited, geared more toward the retirement needs of many than the savvy strategies of a few.
That's why an increasing number of plans are offering self-directed brokerage accounts, also known as "brokerage windows." This option, available in almost 20% of 401(k) plans, allows participants to set aside part of their investments for opportunities beyond their plan offerings. Doing so allows them access to outside brokerages and a broader array of mutual funds, stocks and bonds. As stocks rebound, sending the Dow above 11,000 recently, investors will look for more ways to control their portfolios in the wake of a painful recession. Even though retirement plans are starting to offer exchange traded funds on a limited basis, their increasing popularity could lead more investors to consider brokerage windows that would allow them to trade any fund they want at will. The option also helps level the playing field between 401(k) plans and individual retirement plans. Self-directed IRAs have long been popular with investors who favor flexibility and control. A self-directed IRA can be used to purchase real estate - specific houses and commercial properties, not just REITs. Commodities, currencies and business ventures (including franchises, art and cattle) are allowed investments. While brokerage windows create more options for 401(k) investors, they still shun risky securities, such as derivatives and futures. The brokerage Charles Schwab ( SCHW) first offered self-directed options in 1994. In 2009, 54% of its plans offered a self-directed brokerage account, up from 52% in 2008. Brokerage windows are popular among investors with high balances who work at large companies. In the fourth quarter, participant in its personal choice retirement accounts (PCRA) had $136,000 invested in their plans, on average. "It has definitely grown in popularity, but we do see the usage or the implementation of these types of come and go with the market," says Robert Jesch, product director for Schwab's PCRA accounts. "During the 1998-2000 era, we couldn't add them fast enough. Then, when the market was doing poorly, you weren't seeing as many new plans starting to offer it. So far this year, I've seen a lot more firms looking to add them than I saw in all of last year."