Assistant Secretary of Labor for Employee Benefits Security Phyllis Borzi said Wednesday regulations or guidance may be needed to protect participants in 401(k) plans that allow investing in virtually all a brokerage has to offer.

Most 401(k) plans restrict investment choices to a limited selection of mutual funds offered by the plan provider. But some 401(k) plans offer a “brokerage window” that allows participants to buy stocks, bonds, mutual funds or ETFs as people do who have self-directed IRA, trust or taxable accounts.

Borzi’s statement came in the opening of a Department of Labor effort to find more information about these windows.

In a request for information from the public, the Labor Department acknowledged the windows may allow investors to create better customized, more diverse portfolios and take advantage of special asset classes unavailable in an often confusing multitude of plan investment alternatives.

However, the agency said opponents argue brokerage investments may be too costly and unsuitable for many 401(k) participants because they are not reviewed by plan fiduciaries.

Participants and beneficiaries are not required to receive the same disclosures – such as fees, historical performance and benchmarks -- for investments bought through brokerage windows that they are for “designated investment alternatives.”

The department is seeking information on the scope of investment options typically available through a window; demographic and other information about participants who commonly use brokerage windows; the process of selecting a brokerage window and provider for a plan; the costs of brokerage windows; and what kind of information about brokerage windows and underlying investment options typically is available and disclosed to participants

To see the full text of the request, click here.

The deadline for comments is November 19, but federal agencies routinely accept submissions after the official due-date.