401(k)s, Private Markets, and the New Reality

On August 7, 2025, the White House issued an Executive Order directing agencies to open the door for alternative asset, inncluding private equity, private credit, real estate, and even crypto—inside 401(k) plans. InvestmentNews first flagged the pending action, and the order is now signed, accompanied by an official fact sheet outlining agency follow-ups.

The order tasks the Department of Labor and the SEC with clarifying fiduciary and disclosure frameworks to make private market exposure more feasible for defined contribution plans. Market coverage has been bullish on broader access, but the hurdles of fees, valuation, liquidity, and litigation risk remain. Adoption will depend on the guidance that follows.

For broker-dealers and advisors, the implications are immediate. If plan sponsors begin asking about private-market sleeves in target-date funds or brokerage windows, registered investment advisers and broker-dealers will need programs that can withstand scrutiny under ERISA, SEC, and FINRA rules. Fiduciary prudence, disclosure, valuation governance, and Reg BI obligations are not optional, but they are required guardrails.

This means plan lineup decisions must be documented with care under ERISA 404(a), including manager selection, fee reasonableness, and ongoing monitoring. Participant communications must spell out liquidity limits, valuation practices, performance presentation, and conflicts in plain language, consistent across every channel, with SEC and FINRA marketing rules still applying. Firms must show who marks the book, how liquidity is managed, and how redemption gates work, all in the context of target-date design. Suitability and Reg BI remain central, requiring books and records that demonstrate why a private-market product was chosen for a given client, along with surveillance of communications from representatives.

GiGCXOs’ alternatives consultants are stepping into this gap with a focus on execution rather than theory. The firm brings deep expertise in private markets—spanning GP and LP due diligence, fund operations, and defined-contribution integration to help broker-dealers and advisers operationalize this shift safely. That begins with product and platform readiness: building Know Your Product (KYP) files that detail structure, fees, liquidity, valuation, leverage, conflicts, and risks, then mapping those strategies to plan use cases like target-date sleeves, managed accounts, or brokerage windows.

Next comes governance at an ERISA grade level. GiGCXOs helps draft and implement Investment Committee charters, monitoring calendars, and decision memos that show prudence. The firm also creates participant-level disclosure templates that explain liquidity, fees, and risk dispersion in ways aligned with upcoming DOL and SEC guidance.

Compliance integration is another critical piece. GiGCXOs reviews marketing and communications against the SEC’s Marketing Rule and FINRA’s Rule 2210, ensuring balanced language and proper performance hygiene. Supervisory controls under FINRA 3110, 3120, and 3130 are embedded into workflows, with testing and evidence packs designed to be exam-ready.

Finally, GiGCXOs sets up ongoing monitoring. Firms receive quarterly scorecards comparing performance against pro forma assumptions, along with playbooks for handling valuation anomalies, capital call stress, or gating and redemption events. These playbooks outline what to disclose, when, and how.

The readiness checklist is straightforward: Do you have a written framework for including private assets in defined-contribution plans? Have you created participant-friendly disclosures that reflect real-world complexity? Can you demonstrate suitability and Reg BI compliance for private market communications? Is your monitoring and escalation process clearly defined for valuation, liquidity, and conflicts? If the answer to any of these is no, GiGCXOs says it can take firms from policy to practice quickly and be exam-ready.

For firms willing to act now, the payoff is clear. Those that prepare governance, disclosures, and controls in advance will be positioned to capture demand without inviting regulatory pain. GiGCXOs is encouraging broker-dealers and advisers to contact us today for a consultation.

GiGCXOs provides consulting services and compliance materials. We are not offering legal or investment advice. Sources: InvestmentNews, The White House