While Empower, the nation’s second largest 401(k) plan provider that works on behalf of 19 million Americans, launched a new program in May that paves the way for private markets investments to be included within 401(k) plans, the company obviously has skin in the game, but is now backing up this growing investment option with new research.
The survey found that 68% of advisors already utilize private market investments—including private equity, private real estate, and private credit—primarily in wealth-advised or high-net-worth accounts. Notably, 58% of advisors who utilize private market investments today would recommend them within retirement plans. That figure jumps to 75% among advisors who also serve pension or defined benefit plans, and 43% of advisors overall, signaling growing interest.
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“Private markets are not a niche corner of the investment landscape,” said Edmund F. Murphy III, President and CEO of Empower. “With most U.S. 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.”
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“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,” said Murphy.
According to the survey of advisors, the top perceived benefits of private market investments include:
- Diversification (62%)
- Higher return potential (48%)
- Lower correlation to public markets (48%)
However, advisors also cited the top challenges to broader adoption:
- Liquidity (68%)
- Fees (48%)
- Investment complexity (33%)
Importantly, 66% of advisors indicated that greater ERISA/regulatory clarity would increase their likelihood of recommending private markets in retirement plans, signaling a readiness to engage once the policy environment evolves.
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“As regulatory guidance develops, we see advisors playing a pivotal role in helping plan sponsors evaluate private investment options,” Murphy added. “Professionally managed accounts and prudent exposure limits can help mitigate risk while offering retirement savers access to a broader investment universe.”
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While concerns around liquidity, fees, and complexity remain, there is a clear willingness among advisors to explore thoughtful, risk-aware approaches such as professionally managed accounts and exposure limits, according to the survey. The verdict for some advisors? Yes, with safeguards, as indicated by these results:
- 59% would limit exposure
- 48% would use with advisor-guided solutions or professionally managed accounts
- 33% would use within target date funds
Empower’s new program, which will launch later this year, was designed to provide individuals with access to a broader range of investment options, enabling them to further diversify their portfolios and potentially maximize their retirement savings, Murphy.
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Empower aligned with established private markets managers and custodians, including Apollo, Franklin Templeton, Goldman Sachs, Neuberger Berman, PIMCO, Partners Group and Sagard, to offer these private investments through collective investment trusts (CITs). So far, five employers have signed on to offer private investments in their 401(k) plans when they become available in the third quarter.
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Private investments offered through these seven top asset managers provides limited exposure to diversified pools of private equity, private credit and private real estate, a structure that is designed to provide liquidity protection and reduced fee exposure.
Retirement plan participants can only access private market investments through Empower if their employers allow these investments to be made available.
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“By offering private market assets through defined contribution plans, we’re providing Americans saving for retirement the opportunity to access to some of the most dynamic and growth-oriented investments available …,” said Franklin Templeton CEO Jenny Johnson. “We’re excited to be at the forefront of this transformative change in retirement planning.”
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Now, as President Trump signed the executive order last week that paves the way for alternative assets in 401(k) plans, and as regulatory guidance continues to evolve, more advisors will likely be well positioned to partner with plan sponsors to responsibly introduce private market investments, empowering participants to access a broader range of opportunities in pursuit of long-term financial security.
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Advisors — many of whom are already familiar with private investments in high net worth contexts — are increasingly open to recommending them within retirement plans, particularly if regulatory clarity improves. While concerns around liquidity, fees, and complexity remain, there is a clear willingness among advisors to explore thoughtful, risk-aware approaches such as professionally managed accounts and exposure limits, according to Empower.
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