WASHINGTON, D.C.—Benjamin Schiffrin, Director of Securities Policy, issued the following statement in connection with Better Markets’ New Fact Sheet, “Private Market Assets Do Not Belong in 401(k)s,” and in advance of his participation on a panel discussing retail investors and private markets at an SEC conference on asset management on June 5, 2025:
“There is no serious dispute that private market assets are more opaque, more illiquid, and more expensive than publicly traded stocks and bonds. That’s why the private markets are usually limited to accredited investors who are deemed to be able to fend for themselves. There is no reason to endanger the retirement savings of millions of ordinary American investors by exposing their 401(k)s to expensive and risky private market assets.
“Despite these risks, private market firms say that they should be able to access 401(k)s so retail investors don’t miss out on the supposedly high returns that the private markets offer to accredited investors. But as our new fact sheet shows, the benefits of the private markets are overblown. Research increasingly shows that private market assets do no better than a portfolio comprised of public market stocks and bonds and in many cases do worse.
“So why is there a push to open up the private markets to 401(k)s now? It’s not because workers want less liquid and harder-to-value assets in their 401(k)s. And it’s not motivated by plan sponsors, who have long worried that exposing 401(k) plan participants to private market assets would violate their fiduciary duty to act in the best interest of the investors.
“Instead, it’s because private market firms are finding it harder now to raise money. Their traditional sources of funding—institutional investors such as pensions and endowments—have evaporated. So they want access to the $12 trillion in Americans’ retirement accounts.
It’s not surprising that the industry looks at retail investors and sees dollar signs, but the fact that the industry covets access to millions of Americans’ 401(k)s is no reason to expose the retirement savings of those Americans to the expense and risk of the private markets. The question shouldn’t be what is good for the private funds industry. The question should be what is good for investors and their 401(k)s, and the answer is not private market assets.”
Read the fact sheet here.
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Better Markets is a non-profit, non-partisan, and independent organization founded in the wake of the 2008 financial crisis to promote the public interest in the financial markets, support the financial reform of Wall Street and make our financial system work for all Americans again. Better Markets works with allies—including many in finance—to promote pro-market, pro-business and pro-growth policies that help build a stronger, safer financial system that protects and promotes Americans’ jobs, savings, retirements and more. To learn more, visit www.bettermarkets.org.
