An Executive Order issued by Donald J. Trump marks a significant policy shift that could reshape how Americans invest through 401(k) and other defined contribution retirement plans.
According to an official fact sheet, the Executive Order is designed to increase access to alternative investments—such as private equity, real estate, and digital assets—by directing federal agencies to reexamine long-standing regulatory guidance that has limited their inclusion in ERISA-governed plans.
What the Executive Order Does
The Executive Order focuses on clarifying and modernizing regulatory frameworks that govern defined contribution retirement plans, including 401(k) plans.
Specifically, the Order directs:
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The Department of Labor to reexamine its guidance on fiduciary duties related to alternative investments in ERISA-governed defined contribution plans
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The Department of Labor to clarify the appropriate fiduciary process for offering asset allocation funds that include alternative assets
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Coordination with the Department of the Treasury and the Securities and Exchange Commission to determine whether parallel regulatory changes are needed
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The SEC to update regulations and guidance to facilitate access to alternative investments in participant-directed retirement plans
The goal is not to mandate alternative investments in retirement plans, but to remove regulatory uncertainty that has discouraged plan fiduciaries from offering them.
Why This Matters: Most 401(k) Participants Lack Access to Alternatives
The fact sheet notes that more than 90 million Americans participate in employer-sponsored defined contribution plans, yet most are currently restricted to traditional investments such as mutual funds and target-date funds.
By contrast, wealthy investors and certain government retirement plans often have access to:
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Private equity
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Private credit
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Real estate
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Infrastructure
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Digital assets
The Executive Order acknowledges that these alternative assets may offer diversification benefits and competitive returns, particularly when used as part of a long-term asset allocation strategy.
Regulatory Barriers Have Played a Major Role
Historically, ERISA fiduciaries have been cautious about offering alternative investments due to:
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Ambiguous or restrictive regulatory guidance
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Litigation risk
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Concerns about valuation, liquidity, and disclosure
The fact sheet explicitly states that regulatory overreach and litigation risk have discouraged fiduciaries from including alternative assets—potentially limiting retirement growth for plan participants.
This Executive Order aims to address those concerns by clarifying fiduciary responsibilities rather than expanding fiduciary liability.
Implications for Self-Directed and Solo 401(k) Plans
While much of the public discussion focuses on large employer 401(k) plans, the Executive Order also reinforces a broader policy trend: expanding investment choice in defined contribution plans.
For self-employed individuals using a Solo 401(k):
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Alternative investments have long been permissible when the plan is properly structured
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The Executive Order underscores growing federal support for diversification beyond public markets
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It may further normalize alternative assets within retirement planning conversations
Importantly, Solo 401(k) plans are often better positioned than large employer plans to adopt alternative investments because:
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The participant and fiduciary are the same person
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Investment menus are not constrained by pooled fund requirements
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Custom plan documents from a solo 401k plan provider such as My Solo 401k Financial can explicitly allow alternatives
Digital Assets Receive Explicit Attention
The fact sheet also highlights digital assets, noting that prior guidance restricting crypto exposure has already been rescinded.
The Executive Order aligns with the administration’s broader objective of making the United States a leader in financial innovation, including digital assets, while still operating within regulated retirement plan frameworks.
What This Executive Order Does Not Do
It’s important to clarify what the Executive Order does not do:
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It does not require 401(k) plans to offer alternative investments
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It does not eliminate fiduciary responsibilities under ERISA
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It does not override plan documents or investment policies
Instead, it opens the door for clearer guidance, giving fiduciaries more confidence when evaluating whether alternative investments are appropriate.
Bottom Line
President Trump’s Executive Order represents a meaningful step toward democratizing access to alternative investments within defined contribution retirement plans.
By directing regulators to clarify fiduciary standards and modernize guidance, the Order acknowledges that long-term retirement security may benefit from broader diversification—particularly for the millions of Americans whose retirement savings are concentrated in 401(k) plans.
For self-employed individuals and Solo 401(k) owners, this development reinforces what many already know: alternative investments can play a legitimate, compliant role in retirement planning when structured correctly.
