Advisors eye private market investments for 401(k)s as interest builds

A growing number of financial advisors are signaling readiness to bring private market investments into 401(k) accounts, according to a new survey.

Last week, President Trump signed an executive order which the White House says will “allow 401(k) investors to access alternative assets for better returns and diversification.” The order creates a path to investments in private markets for retirement savers.

The newly released July 2025 poll of 237 advisors by Empower found that 68% already use private market assets such as private equity, private real estate, and private credit, mainly in high-net-worth or wealth-advised accounts.

But the real movement is in retirement plans with 58% of advisors who are familiar with these investments stating they would recommend them in defined contribution plans, a figure that jumps to 75% among those also serving pension or defined benefit plans. More than four in ten of all respondents would recommend private markets assets.

“Private markets are not a niche corner of the investment landscape,” says Edmund F. Murphy III, President and CEO of Empower. “With most US companies privately held and trillions of dollars from individuals already invested, expanding access to these markets through defined contribution plans presents a significant opportunity to enhance long-term retirement outcomes. Advisors have a crucial role to play in responsibly guiding that evolution.”

Nearly all US companies (99%) are privately held and an estimated $14.3 trillion is already invested in private markets. Advisors ranked diversification (62%), higher return potential (48%), and lower correlation to public markets (48%) as top benefits.

However, challenges remain with liquidity concerns (68%) fees (48%) and investment complexity (33%) cited by respondents while 66% said greater ERISA/regulatory guidance would make them more likely to recommend private markets in retirement plans.

“As regulatory guidance develops, we see advisors playing a pivotal role in helping plan sponsors evaluate private investment options,” Murphy adds. “Professionally managed accounts and prudent exposure limits can help mitigate risk while offering retirement savers access to a broader investment universe.”

Many advisors favor a measured approach with 59% saying they would limit exposure, 48% would use private markets within target-date funds, and another 48% would integrate them through advisor-guided solutions or professionally managed accounts.

In May 2025, Empower launched a program allowing private market exposure in DC plans via collective investment trusts managed by seven leading asset managers. The CITs provide access to diversified pools of private equity, credit, and real estate, with structures designed to mitigate liquidity and fee pressures.

“Aligning the 401(k) system to private markets investing normalizes the U.S. retirement system with the rest of the international and defined benefit investing universe,” concludes Murphy.