Executive Order
President Trump issued an Executive Order on August 7, 2025, which paves the way for your 401(k) to invest into alternative assets such as real estate, crypto, and private equity. The Order states the following,
“It is the policy of the United States that every American preparing for retirement should have access to funds that include investments in alternative assets…”
The Order defines alternative assets as private equity, private debt, real estate, digital assets (crypto), commodities, and infrastructure. These “alternative” investment assets do not trade on a public stock market and even though your 401(k) can already own a private asset under law, the federal regulatory framework has caused most 401(k) providers to restrict these assets. The Order seeks to provide new regulatory framework that would encourage the adoption of alternative assets in 401(k)s.
How Alternative Assets Can Outperform
First, the order outlines how alternative assets (e.g., private equity, real estate, crypto) can outperform the stock market and provide better retirement investing outcomes but that alternative assets have been only available to wealthy investors, pooled pension funds, and endowments. This order seeks to democratize and provide greater access to these asset classes and directs the Securities and Exchange Commission to issue new regulatory guidance to allow for the investment of 401(k) accounts into alternative assets.
New Guidance from Department of Labor
Second, the order directs the Department of Labor to issue new guidance which would provide fiduciary liability protection to plan advisors, trustees, and companies. Many advisors and plan trustees who are fiduciaries to 401(k) plans know and believe that alternative assets can provide greater returns, but do not recommend them for 401(k) plans because of fear of fiduciary liability litigation. The DOL guidance will provide fiduciary protection when a fiduciary prudently balances potentially higher expenses (as can occur on alternative assets) against the objectives of seeking greater long-term net returns and broader diversification of investments.
Key Takeaway
The bottom-line takeaway is that the federal government is making it easier to invest into alternative assets with a 401(k). This is a welcome change and opportunity for many Americans whose wealth is concentrated in retirement accounts and who see overvalued stocks and less publicly traded companies with which they can invest into.
Statement from CEO of Directed IRA
Mat Sorensen, CEO at Directed IRA by Directed Trust Company said:
“This Order is a huge step forward that will make it easier to invest your 401(k) into assets you know and believe in. As a retirement account custodian with over $3B in alternative assets held by IRAs and 401(k)s, we know that investors are hungry for more investment opportunities than the stock market. IRA account investments into alternative assets have grown dramatically in the past decade and self-directed IRAs, which we offer, are investing hundreds of billions of dollars already into real estate, private equity, and crypto. But 401(k) accounts, sadly, have been held back by federal regulatory constraints. This new order seeks to turn the tide and is a huge step in the direction of greater investment options and opportunities for 401(k) investors.”
