As the US allows 401(k) investors to access assets such as cryptocurrency and real estate, there seems to be little official recognition of the risks.
Earlier this month, the White House announced that US President Donald Trump had signed an executive order “to allow 401(k) investors to access alternative assets for better returns and diversification”. Aside from perhaps property tycoons and tech barons, few have reason to applaud this move, which allows retirement fund investors to access risky financial assets such as cryptocurrencies and real estate.
Setting aside for a moment the fact that Trump or members of his family have vested interests in some of these asset classes, Trump’s apparent contempt for prudential regulation threatens to put trillions of dollars of pension fund assets at risk just at a time when they are badly needed for more responsible forms of investment.
