At a Glance
- The Department of Labor has proposed a new rule that could allow alternative investments, including private credit and cryptocurrency, within 401(k) plans.
- Alternative investments introduce higher levels of risk and complexity, and investors should exercise caution without a clear understanding of those risks.
- Highly diversified, marketable solutions within TRB investment lineups remain appropriate for most plan objectives.
- The proposed rule does not change the core responsibility of fiduciaries to evaluate whether investment strategies support long-term plan outcomes.
The Department of Labor (DOL) has recently proposed a new rule regarding investment options available in 401(k) plans. Through executive order, President Trump has directed the DOL to draft rules that would allow alternative investments such as private credit and cryptocurrency within these plans.
To support that effort, the DOL has outlined six factors that plan fiduciaries must follow to fulfill investment due diligence responsibilities: (1) performance, (2) fees, (3) liquidity, (4) valuation, (5) benchmarking, and (6) the complexity of the designated investment alternatives.
The proposed rule, titled “Fiduciary Duties in Selecting Designated Investment Alternatives,” has been published in the Federal Register, with a 60-day comment period running through June 1, 2026. We will continue to monitor updates as the DOL provides additional guidance following that period.
View the full text of the proposed rule or submit a public comment, here: Federal Register: Fiduciary Duties in Selecting Designated Investment Alternatives
Considerations Around Alternative Investments
Generally speaking, alternative investments may not be the right fit within a 401(k) plan, particularly those referenced in the executive order, which include private credit and cryptocurrencies.
These asset classes introduce higher levels of risk and complexity, and without a clear understanding of those risks, 401(k) investors should exercise caution.
We continue to believe highly diversified, marketable solutions within TRB investment lineups remain appropriate for most plan objectives.
The DOL’s Six-Factor Framework
The proposed six factors are a useful framework for fiduciaries to evaluate investment options, and TRB Trust & Wealth Management has historically approached due diligence in a similar form:
- Performance: evaluating whether projected performance, given the economic environment, is appropriate to reach plan goals
- Fees: reviewing and comparing fees to determine if they are reasonable relative to the strategy and market conditions
- Liquidity: ensuring each strategy provides an appropriate level of liquidity based on approach and plan needs
- Valuation: confirming that asset pricing is adequate and available given the approach and plan needs
- Benchmarking: comparing performance to relevant benchmarks to assess whether strategies are meeting expectations
- Complexity: determining whether the level of complexity is appropriate for the strategy and the plan
Learn what it means to have Informed Peace of Mind from The People You Know at TRB Trust & Wealth Management.
Ongoing Fiduciary Responsibility
While the primary objective of the proposed rules may be to facilitate broader access to alternative investments, the introduction of these factors does not change the core responsibility of plan fiduciaries.
Our approach remains consistent. Each investment strategy is evaluated based on its role within the plan, its structure, and its ability to support long-term outcomes for participants.
We continue to believe that marketable, diversified solutions may provide more consistent outcomes in achieving plan goals compared to more illiquid or complex alternatives.
About TRB Trust & Wealth Management
TRB Trust & Wealth Management is a boutique fiduciary division of Texas Regional Bank, providing investment management, estate and trust administration, financial planning, and family office services to help individuals, families, and institutions manage, protect, and transfer wealth across generations.
Operating within TRB’s diversified financial services platform, TRB Trust & Wealth Management combines institutional investment capabilities with relationship-driven service from locally based professionals across Texas.
For more information about TRB Trust & Wealth Management, visit https://www.trb.bank/wealth-management.
DISCLOSURES:
Investment and insurance products: NOT FDIC INSURED | MAY LOSE VALUE | NO BANK GUARANTEE
TRB Wealth Management, LLC is a Registered Investment Advisor with the Securities and Exchange Commission
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TRB Wealth Management, LLC does business in the name of TRB Trust and Wealth Management. Trust and Family Office services offered exclusively through Texas Regional Bank. The trust department of Texas Regional Bank has engaged TRB Wealth Management, LLC to provide investment advice to Texas Regional Bank for trust department accounts.
