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Things I Worry About (17): Executive Orders, Private Funds, and Fiduciary Standards (3)


DOL, fiduciary
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Key Takeaways

  • The Trump administration has issued an Executive Order about facilitating 401(k) investments in “alternative assets.”
  • The Order directs the Secretary of Labor to examine current guidance and decide if it is appropriate for that purpose.
  • The Order also directs the Secretary of Labor to issue guidance to clarify fiduciary responsibilities for 401(k) investing in alternative assets and to consider providing fiduciary guidance.

My last two articles, Things I Worry About (15) and Things I Worry About (16), reviewed  the President’s August 7 Executive Order (EO) entitled Democratizing Access to Alternative Assets for 401(k) Investors (Democratizing Access to Alternative Assets for 401(K) Investors – The White House) and some of the misunderstandings about what the EO says.

This article focuses on parts of the EO that I believe to be particularly significant.

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Things I Worry About (15): Executive Orders, Private Funds, and Fiduciary Standards (1)


fiduciary
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Key Takeaways

  • The Trump administration has issued an Executive Order about facilitating 401(k) investments in “alternative assets.”
  • The Order directs the Secretary of Labor to examine current guidance and decide if it is appropriate for that purpose.
  • The Order also directs the Secretary of Labor to issue guidance to clarify fiduciary responsibilities for 401(k) investing in alternative assets and to consider creating a fiduciary safe harbor.

This article examines the President’s August 7 Executive Order (EO) entitled Democratizing Access to Alternative Assets for 401(k) Investors (Democratizing Access to Alternative Assets for 401(K) Investors – The White House) and some of the misunderstandings about what the EO says.

The EO uses the term “alternative assets” and defines it as follows:

  • Private market investments, which would include, among others, private equity, private debt, and hedge funds.
  • Interests in real estate and debt instruments secured by real estate.
  • Actively managed vehicles holding digital assets.
  • Investments in commodities.
  • Interests in projects financing infrastructure development.
  • Lifetime income investment strategies including “longevity risk-sharing pools.”

Continue reading Things I Worry About (15): Executive Orders, Private Funds, and Fiduciary Standards (1) →

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