President Trump is set to sign an executive order allowing 401(k) investors to put savings in private assets. The move aims to boost diversification and potential returns but comes with risks. Private assets are less liquid and require understanding. BlackRock CEO Larry Fink advocates for a 50/30/20 split between stocks, bonds, and private assets.

Lisa Kirchenbauer warns investors to comprehend the risks and returns of private assets before investing. Private assets, like real estate and private equity, offer potential long-term returns but lack liquidity. Fink believes 401(k) plans can benefit from including private assets, as pension funds have done for years.

Empower plans to offer private equity, credit, and real estate in retirement portfolios. BlackRock introduces a target-date fund with private credit and equity to increase returns. Private assets democratize investment opportunities but require caution due to limited liquidity and potential performance fees.

Private assets in retirement accounts may increase costs for investors. These assets are generally reserved for sophisticated investors, and understanding them can be challenging. Participants may be unaware of what they are investing in, raising concerns about transparency and fees. Private equity’s inclusion could impact costs in 401(k) plans.

Read more at Yahoo Finance: Experts advise caution in adding private assets like crypto to 401(k)s