Things move very, very slowly in the realm of U.S. retirement savings.
It took decades to adopt automation and target-date funds. Yet a recent White House order directing regulators to expand access to alternative investments in 401(k) plans could send a jolt to the $12.2 trillion employer-sponsored 401(k) system.
U.S. President Donald Trump recently signed an executive order to allow more private equity, real estate, digital assets and other alternative assets in 401(k) retirement accounts.
Some experts say adding new kinds of investments to retirement portfolios could add extra fees, along with higher risk for investors.
But broadening the investment menu can be a good thing, particularly when it gives skilled money managers more options to broaden portfolios, Hal Ratner, head of research at Morningstar Investment Management in Chicago, told me last week.
"More may not be better, but it's never bad," says Ratner, noting that the best term for this emerging group of investments is "semi-liquid vehicles."
What are your thoughts? If you're a retirement industry expert, I'd love to speak with you further about the use of alternative assets/semi-liquid vehicles in retirement plans around the globe, so please reach out: onthemoney@thomsonreuters.com.
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