The retirement industry was shaken a few weeks ago by an executive order directing federal agencies to revisit long-standing rules restricting private equity, direct real estate, and cryptocurrency investments within 401(k) plans. While the headlines may paint this as the future of retirement innovation, we believe this moment calls for something else entirely: prudence.
As retirement plan record-keepers, TPAs, and advisors, our job and yours as plan fiduciaries is to look beyond the headlines and focus on what actually improves participant outcomes.
On August 7, 2025, an executive order instructed the Department of Labor (DOL), the Securities and Exchange Commission (SEC), and the Treasury to reassess existing regulations that limit access to alternative assets in 401(k) plans.
Proponents argue this expands opportunity, democratizing access to asset classes once reserved for institutional investors. But let’s be clear: access does not equal appropriateness. And innovation is not always progress.
Where We Stand: It’s Too Early
Innovation is reshaping retirement plans, and the pace of change is exciting. From private equity to direct real estate and even crypto, new asset classes are entering the 401(k) conversation. While these developments spark important dialogue, the reality is that retirement plans tend to evolve more deliberately than other areas of the financial world and that’s a good thing.
As fiduciaries, our first responsibility is to make prudent decisions that serve participant’s best interests. That means embracing innovation with curiosity, but also with discipline. We are closely monitoring how these asset classes develop, but at this stage we do not believe it’s the right time to introduce them into our plans.
Our focus remains clear: protecting participants, honoring our fiduciary duty, and ensuring that every step we take is both responsible and sustainable. Innovation has a place in the future of retirement plans, but only when it aligns with the long-term outcomes our participants deserve. We are watching closely, but our focus remains squarely on fiduciary best practices and doing what is in the long-term best interest of participants.
Most participants don’t need exposure to opaque, illiquid, high-fee investments to retire successfully. They need:
Private funds will have a role in institutional portfolios, but bringing them into participant-directed accounts introduces complexity and fiduciary risk that we believe is premature to navigate at this time.
Before introducing new asset classes, let’s first use the tools already available and too often underutilized to improve participant outcomes:
These strategies are proven, practical, and aligned with fiduciary principles—and yet they remain inconsistently adopted across the industry. That’s where the focus should be.
You are not required to add these new asset types. If anything, acting too quickly before regulatory clarity, operational support, and participant understanding catch up may introduce unnecessary risk.
This is a good time to:
We support thoughtful innovation that improves retirement readiness. While private equity, direct real estate, and cryptocurrency may not yet be ready for widespread adoption in participant-directed accounts, the long-term potential is worth watching closely.
We expect meaningful product innovation driven primarily by investment managers themselves to gradually make these asset classes more operationally feasible, cost-efficient, liquid and transparent. This evolution will take time, and adoption should be measured and intentional. Still, we believe that when innovation is guided by fiduciary discipline and participant benefit, it can open new avenues to strengthen retirement outcomes.
The future of retirement investing will be shaped not only by regulatory change, but by the creativity and responsibility of product manufacturers, and that is a positive development for the industry.
If you’d like to discuss how this development may impact your plan, or explore strategies already at your fingertips to improve participant outcomes, we’re here to help.
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