Extensive public discourse has centered around the diminishing efficacy of the traditional 60/40 portfolio, comprising equities and fixed income.  The modern 60/40 portfolio swaps underperforming fixed income assets for alternative investments, such as private real estate, equity, debt, and credit.  These alternative assets typically exhibit minimal correlation to the stock market while being less volatile.

For retail investors predominantly owning non-qualified assets, transitioning to the new 60/40 portfolio has not presented significant hurdles.  However, for investors with assets primarily in qualified retirement plans like 401(k) Profit Sharing Plans, it has proven more challenging.  Currently, direct access to alternative investments through the designated investment menu of retirement plans isn’t feasible due to various constraints.  The sole option is to access these funds through a Self-Directed Brokerage Account (SDBA) on a brokerage platform offering such alternatives, which most retail brokerage platforms do not facilitate.

We have been at the forefront of facilitating alternative investment access for participants in retirement plans under our management.  Plans with SDBAs established under our advisory at Charles Schwab or Fidelity can access a wide array of alternative assets.

Our institutional brokerage platforms on Schwab and Fidelity provide access to private funds through our strategic partners that include Blackstone, Ares, Starwood, Origin, and a few more.  In addition to the alternative investments, participants can access mutual funds, ETFs, and individual securities that are not available through the designated plan investment menu.

Contact us to learn more about accessing alternative investments through your 401(k) plan.