President Trump signed an executive order to open up retirement plans to private-market investments, aiming to increase Americans’ investment options. The move reverses a Biden-era restriction and encourages agencies to update rules that would allow more 401(k) funds to access alternatives like private equity and hedge funds.
Key Facts:
- President Trump signed an executive order Thursday to allow private-market investments in retirement plans.
- The Labor Department is directed to reexamine rules on including alternative assets in 401(k) plans.
- The SEC and Treasury Department will work with Labor to assess any needed regulatory changes.
- Private-market investments include private equity, real estate, venture capital, and hedge funds.
- Major firms like Apollo, State Street, and Blue Owl are already rolling out products with private-market components.
The Rest of The Story:
Trump’s executive order reopens access to private-market investments within defined-contribution retirement accounts, such as 401(k)s. These investments are typically higher risk but offer the potential for greater returns compared to traditional public market options like stocks and bonds.
The order directs the Department of Labor to revisit its guidance and coordinate with both the Treasury and the SEC. Their goal is to determine whether new rules are needed to support this shift. The SEC is also instructed to make regulatory changes that would help retirement plans offer access to these alternative assets.
Bryan Corbett, CEO of the Managed Funds Association, praised the move. “Expanding access to alternative investments in 401(k) retirement plans will provide more Americans with the diversification and investment options needed to build wealth,” he said.
Several firms have already taken steps to align with the anticipated change, including Apollo Global Management and State Street, which launched a new target-date fund featuring private assets.
Fact Sheet: President Donald J. Trump Democratizes Access to Alternative Assets for 401(k) Investorshttps://t.co/kBmDeAGNv0
— Karoline Leavitt (@PressSec) August 7, 2025
Commentary:
This decision could be a game changer for American workers trying to build wealth in a market that’s become harder to predict. Most people rely heavily on their 401(k)s for retirement, and for decades those plans have been limited to traditional stock and bond options. That limitation put savers at a disadvantage, especially during market downturns when broader diversification could reduce risk and improve returns.
By allowing access to private equity, hedge funds, and other non-traditional investments, this order gives Americans more freedom over how they grow their money. Many of these options were previously only available to institutional investors or the very wealthy.
Critics have often claimed that these types of investments are too risky, but that decision should ultimately be left to the individual—not dictated by the government or legacy fund managers. Adults planning for retirement should be treated as responsible enough to evaluate risk and choose the right mix for their own financial goals.
The previous restrictions served the interests of plan sponsors more than workers. Limiting options made things simpler for fund managers, but it hurt the people whose money was actually on the line. That imbalance has long needed correction.
This executive order realigns retirement savings policy with individual freedom. It returns power to the worker rather than allowing bureaucrats to choose winners and losers in the retirement market.
Furthermore, this could spur more innovation in retirement investment products. As firms like Apollo, State Street, and Blue Owl jump into the space, competition will likely drive down fees and improve offerings.
Investors may still need education to understand the full range of new opportunities, but giving them access is the right first step.
The Bottom Line:
Trump’s executive order reopens 401(k) access to private-market investments, giving Americans more control and flexibility over their retirement funds. The order reverses Biden-era restrictions and is expected to drive innovation across the retirement planning industry.
For workers, this could mean better diversification, potentially stronger returns, and the ability to tailor portfolios more closely to personal goals. It’s a win for financial freedom and investor choice.
