By Esther Ososanya
U.S. President Donald Trump is set to sign an executive order Thursday that will pave the way for Americans to invest in alternative assets, including private equity, real estate, and cryptocurrency, through their 401(k) retirement plans, according to a senior White House official.
The move could unlock access to the $12 trillion defined contribution retirement market for major asset managers like Blackstone, KKR, and Apollo Global Management.
The order directs the Securities and Exchange Commission (SEC) to revise regulations to allow broader inclusion of non-traditional investment options in retirement accounts.
The order also tasks the labour secretary with coordinating with Treasury and SEC counterparts to align regulatory frameworks across agencies.
If enacted, the policy could significantly reshape the way Americans build long-term retirement portfolios by opening the door to assets typically reserved for institutional investors.
Proponents argue that younger workers could benefit from the higher return potential of alternative assets, especially within retirement funds that shift to safer holdings over time.
However, critics warn that such investments are often illiquid, carry higher fees, and pose greater risks, raising concerns about investor protection.
Legal experts have flagged the possibility of lawsuits from investors who may not fully understand the risks involved. Asset managers like BlackRock, which supports the change, plan to launch new retirement products next year featuring private equity and private credit.
Caution from Industry Leaders
BlackRock CEO Larry Fink acknowledged litigation risks and emphasised the need for robust analytics and investor education. CFO Martin Small suggested that litigation reform may be necessary before widespread adoption can occur.
During Trump’s previous term, the Department of Labour issued guidance permitting limited private equity exposure in 401(k)s, but uptake was minimal due to legal uncertainty.
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Senator Elizabeth Warren has voiced strong opposition, citing a lack of transparency and weak investor protections in the private investment sector.
She recently questioned Empower Retirement, which oversees $1.8 trillion in assets, on how it plans to safeguard retirement funds under the new policy direction.
Esther Ososanya is an investigative journalist with Pinnacle Daily, reporting across health, business, environment, metro, Fct and crime. Known for her bold, empathetic storytelling, she uncovers hidden truths, challenges broken systems, and gives voice to overlooked Nigerians. Her work drives national conversations and demands accountability one powerful story at a time.
