We've all experienced it – anyone who's ever advised a 401(k) plan. There's always one employee who knows it all. He's the guy (and, yes, I'm not being sexist, but it usually is a guy) who thinks he could school Warren Buffet. He is, after all, the only person who believes some obscure fund with only $100,000 in assets is about to explode. It usually does, except not "explode" as in "ever higher growth," but "explode" as in "blow up."
See also: I failed my 401(k)
Many times, a 401(k) plan sponsor will create a special "self-directed brokerage account" to appease these employees (who may, in fact, be owners or high level executives of the firm). These plan sponsors may be under the impression that giving these employees free range both solves the problem of their vociferousness and leaves the plan sponsor off the hook in terms of liability.
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