Trump Executive Order on 401(k)s and Private Markets: What Advisors Need to Know

What This Means for Financial Advisors

1. A Broader Investment Toolkit
   

   Advisors can enhance retirement portfolios by including private market investments that were once exclusive to institutions.  These investments have been a core component of defined benefit plans for decades, helping clients reach long-term retirement objectives through multiple market cycles. By introducing alternatives that provide diversification with low-correlation to traditional markets, advisors can help reduce volatility and pursue more consistent, long-term growth.

2. Rising Fiduciary Expectations

   
   As alternative investments become part of defined contribution (DC) plans, advisors face some increased fiduciary responsibilities, including thorough due diligence, risk documentation, and educating plan sponsors and participants about complexities and illiquidity. Meeting these expectations offers advisors the opportunity to elevate their role from a traditional advisor to a trusted strategic fiduciary partner.

3. Competitive Differentiation
   

   A majority of DC plans are still built around traditional mutual funds. Advisors who bring alternative investments into 401(k)s can differentiate themselves by attracting new plan sponsors, enhancing managed account offerings, and integrating rollover and wealth planning strategies. This creates a meaningful competitive advantage.

Bringing Private Markets Within Reach: The Role of CITs

Collective Investment Trusts (CITs) offer a simple, effective way to add private-market strategies to DC plans. Designed specifically for qualified plans, CITs combine flexibility, compliance, operational simplicity, and reduced cost that no other investment vehicle offers.

1. Retirement Plan Ready
   

   CITs are specifically built for qualified retirement plans like 401(k)s making it easier for advisors to include private equity, private credit, real estate, and infrastructure investments while aligning with participant needs and plan operations.

   • Designed to work within ERISA frameworks
   • Compatible with plan operations and recordkeeping systems
   • Supports participant-level accounting and managed accounts

2. Improved Liquidity & Access
   

   CITs make alternative investments more accessible and practical for retirement plans. Advisors can offer institutional-quality investments to a broader set of plan sponsors and participants, creating new value and competitive differentiation.

   • Offer periodic (e.g., quarterly) liquidity windows
   • Lower minimums than traditional private funds
   • Aggregate assets across plans for scale and access

3. Simplified Tax Treatment
   

   CITs help avoid tax and filing issues that can come with direct private fund investments. This reduces compliance risk and back-office complexity so that advisors can focus on strategy, not tax issues.

   • Structured to block Unrelated Business Taxable Income (UBTI)
   • Avoid K-1s and IRS filings at the plan level
   • Maintain a plan’s tax-exempt status

4. Fiduciary Oversight & Compliance
   

   CITs offer built-in governance designed enabling advisors to confidently meet their fiduciary duties and build trust with plan sponsors.

   • Managed by a bank trustee aligned with OCC guidelines
   • Regular valuations and third-party audits
   • Transparent due diligence, documentation, and reporting

5. Institutional Pricing & Transparency
   

   CITs have efficient pricing & clear cost structures allowing advisors the ability to offer high-quality private investments at a lower cost.

   • Typically lower fees than mutual funds or fund-of-fund structures because they avoid SEC regulatory requirements
   • Clear, negotiable pricing terms
   • Designed for benchmarking, oversight, and disclosure

6. Access for Non-Accredited Investors
   

   Through CITs, advisors can extend access of certain alternative investments to everyday plan participants—enhancing retirement outcomes and leveling the playing field.

Alta: Leading the Way

At Alta, we’ve been helping advisors access institutional-caliber investment solutions through Collective Investment Trusts (CITs) for years. Long before the current policy spotlight, we recognized the value of bringing private-market strategies into qualified retirement plans, without sacrificing transparency or fiduciary safeguards.

Advisors can work with Alta to custom-build a CIT that reflects their investment philosophy, or select from a diverse range of existing CITs offering access to private equity, private credit, real estate, and other alternatives.

A recent example is our collaboration with LeafHouse to launch a CIT featuring private investments managed by Apollo and Franklin Templeton. This solution is designed specifically for managed account programs and is just one in a growing lineup of Alta CITs that offer exposure to real estate, private credit, and other alternative strategies.

Read the full announcement

With a deep bench of expertise and a focus on collaboration, Alta is ready to help advisors unlock the potential of private markets within retirement plans.

LeafHouse Announces Alta Trust’s CIT Featuring Private Investments Managed by Apollo and Franklin Templeton

The Road Ahead

The executive order may accelerate the trend, but the industry has been moving in this direction for years. Advisors now have an opportunity to stand out by embracing a more sophisticated toolkit and delivering investment solutions that reflect modern portfolio construction.

Ready to explore how Collective Investment Trusts can enhance your retirement plans?

Schedule a consultation with Alta today and discover tailored solutions designed to meet your clients’ unique needs.