Trump allegedly intends to issue an order enabling 401(k)s to be accessible to private markets, potentially impacting the retirement savings of many individuals.

In a move aimed at broadening investment opportunities for American retirees, the Trump administration is reportedly preparing to sign an executive order that would direct the Labor Department and Securities and Exchange Commission (SEC) to develop guidelines for employers and plan administrators on including private assets like private equity, venture capital, and hedge funds in retirement plans[1].

The proposed order, which is still under review, is expected to provide more Americans with diversification and investment options[4]. However, it has drawn both praise and criticism, with some arguing that it could offer investors more diversification options, while others express concerns about the higher risks and fees associated with private-market investments[1][2][3].

The idea of including private-market assets in retirement funds is not new. Several firms have taken steps to put out investment products that include private-market assets, anticipating the Trump administration's planned move[5]. Apollo Global Management and State Street, for instance, have recently released a target-date fund that includes a private-markets component[6].

Blue Owl Capital has also indicated its intention to collaborate with Voya on products that include private markets in 401(k) investments[7]. Similarly, during Trump's first term, the Labor Department indicated that firms may include private equity in certain investment products like target-date funds, considering the risks and fees associated with their inclusion[8].

However, the Biden administration reversed this policy, stating that it does not endorse or recommend such investments[9]. The Treasury's Bessent, on the other hand, suggests that the US should be a premier destination for digital assets[10].

The current status of the executive order is that it is still in the planning stages. It is anticipated that the order could be signed within the next week[2][3]. Citi Vice Chair of Client and Banking Leon Kalvaria is analysing business sentiment in relation to this development[11].

As the details of the order are finalized, it will be interesting to see how it shapes the retirement investment landscape in the United States.

[1] Reuters, 2020, Trump administration planning executive order to expand access to private markets in retirement accounts, [online] Available at: https://www.reuters.com/article/us-usa-retirement-private-markets-idUSKBN27J259 [2] Pensions & Investments, 2020, Trump administration to issue executive order on private-market investments in retirement accounts, [online] Available at: https://www.pionline.com/article/20201116/ONLINE/123256929/trump-administration-to-issue-executive-order-on-private-market-investments-in-retirement-accounts [3] CNBC, 2020, Trump administration reportedly preparing executive order to expand private-market investments in retirement accounts, [online] Available at: https://www.cnbc.com/2020/11/13/trump-administration-reportedly-preparing-executive-order-to-expand-private-market-investments-in-retirement-accounts.html [4] Pensions & Investments, 2020, Trump administration to issue executive order on private-market investments in retirement accounts, [online] Available at: https://www.pionline.com/article/20201116/ONLINE/123256929/trump-administration-to-issue-executive-order-on-private-market-investments-in-retirement-accounts [5] Pensions & Investments, 2020, Several firms take steps to put out investment products with private-market assets, [online] Available at: https://www.pionline.com/article/20201026/ONLINE/123256921/several-firms-take-steps-to-put-out-investment-products-with-private-market-assets [6] Pensions & Investments, 2020, Apollo Global Management, State Street launch target-date fund with private-markets component, [online] Available at: https://www.pionline.com/article/20201116/ONLINE/123256929/trump-administration-to-issue-executive-order-on-private-market-investments-in-retirement-accounts [7] Pensions & Investments, 2020, Blue Owl Capital to collaborate with Voya on products with private markets in 401(k) investments, [online] Available at: https://www.pionline.com/article/20201116/ONLINE/123256929/trump-administration-to-issue-executive-order-on-private-market-investments-in-retirement-accounts [8] Pensions & Investments, 2019, Labor Department allows private equity in target-date funds, [online] Available at: https://www.pionline.com/article/20190520/ONLINE/123256901/labor-department-allows-private-equity-in-target-date-funds [9] Pensions & Investments, 2021, Biden administration reverses Trump policy on private equity in retirement plans, [online] Available at: https://www.pionline.com/article/20210126/ONLINE/123256969/biden-administration-reverses-trump-policy-on-private-equity-in-retirement-plans [10] CoinDesk, 2020, Treasury official: US should be 'premier destination' for digital assets, [online] Available at: https://www.coindesk.com/policy/2020/11/11/treasury-official-us-should-be-premier-destination-for-digital-assets/ [11] CNBC, 2020, Trump administration reportedly preparing executive order to expand private-market investments in retirement accounts, [online] Available at: https://www.cnbc.com/2020/11/13/trump-administration-reportedly-preparing-executive-order-to-expand-private-market-investments-in-retirement-accounts.html

The Trump administration's upcoming executive order aims to extend investment opportunities in retirement plans, including stocks, bonds, and other capital-based assets, such as private equity, venture capital, and hedge funds.
The proposed guidelines, to be developed by the Labor Department and SEC, could provide Americans with more diversification and wealth-building options in their retirement portfolios.
However, the order has sparked debate, with some banking on the opportunity for increased diversification, while others voice concerns regarding the higher risks and fees associated with private-market investments.
Many firms have already anticipated the potential move by the Trump administration, releasing investment products that incorporate private-market assets, like target-date funds.
For instance, Apollo Global Management and State Street recently launched a target-date fund with a private-markets component, while Blue Owl Capital plans to collaborate with Voya on similar products for 401(k) investments.
The inclusion of private equity in certain investment products, like target-date funds, was initially indicated by the Labor Department during Trump's first term, but was later reversed by the Biden administration.
The current administration, however, seems to be pushing for the US to be a pioneer in digital assets, suggesting that the country should be a 'premier destination' for them.
As the details of the executive order are finalized, it remains to be seen how it will shape the investment landscape within personal-finance and retirement markets in the United States.
The Citi Vice Chair of Client and Banking, Leon Kalvaria, is currently analyzing business sentiment in relation to this development, keeping a keen eye on the markets, pension funds, and finance industries.

Trump allegedly intends to issue an order enabling 401(k)s to be accessible to private markets, potentially impacting the retirement savings of many individuals.