Key Takeaways:
- Greater Access to High-Growth Investments: Trump’s executive order directs the DOL and SEC to make it easier for 401(k) and workplace plans to include private equity, real estate, and other alternative assets.
- Maintains Fiduciary Protections: Employers must still conduct thorough due diligence, ensuring any new offerings are prudent, transparent, and in participants’ best interests.
- Signals Pro-Growth Shift: While rule changes may take until 2026, the move underscores a broader push toward investment freedom and reduced regulatory barriers.
President Donald Trump is once again shaking up the status quo—this time taking aim at the retirement investment industry with an executive order designed to open the door for everyday Americans to access the kind of high-growth opportunities long reserved for Wall Street elites.
On Thursday, Trump signed an order instructing the Department of Labor (DOL) and the Securities and Exchange Commission (SEC) to clear the regulatory cobwebs and let 401(k) and workplace retirement plans offer alternative investments—think private equity, real estate, commodities, and even certain digital assets.
The goal? “Relieve the regulatory burdens and litigation risk” so employers can “apply their best judgment” in providing new investment options for workers. Translation: empower Americans to diversify and grow their nest eggs without Washington’s heavy hand picking winners and losers.
The $12 trillion defined-contribution market has been a fortress for decades—dominated by low-risk, low-reward mutual funds—while private equity’s explosive gains have been off-limits to ordinary savers. Trump’s move could change that. While there’s no law forbidding these investments, most employers have avoided them over fiduciary fears. This order calls on agencies to “clarify” how to prudently balance the potential for higher returns against higher costs.
Naturally, the usual suspects on the Left are clutching their pearls. Sen. Elizabeth Warren is already fretting about “systemic risk” and lobbying for more government oversight. It’s the same tired playbook: keep opportunity bottled up for the connected few under the guise of “protecting” you.
Make no mistake—this isn’t a free-for-all. Fiduciary duty still stands, and plan sponsors will have to vet these options carefully. But the principle here is quintessentially American: trust people to make informed choices, provide transparency, and unleash the power of free markets.
As private markets have ballooned—now boasting 25 times more firms than the public market—the growth potential for retirement savers has shifted behind closed doors. Trump’s order is a first step toward kicking those doors open.
It won’t transform your 401(k) overnight—rulemaking will stretch into 2026—but it signals a clear pro-growth, pro-opportunity direction. And for millions of Americans tired of being told they can’t handle the “big boy” investments, that’s a welcome change.
Once again, Trump is betting on the American worker. And history suggests that’s a smart investment.