Article: Allvue’s Philtsa Hanson Weighs in on Alternative Investments in 401(k) Plans in Reuters

The recent executive order directing regulators to expand access to alternative investments in 401(k) retirement plans, such as private equity, private credit, and cryptocurrency has the potential to reshape the retirement landscape for millions of Americans. While proponents highlight the potential for higher returns, critics warn of significant risks, including higher fees, lower liquidity, and limited transparency compared to traditional investment options.

In a recent Reuters article, Philitsa Hanson, Head of Product, Equity & Fund Administration at Allvue Systems, cautioned that incorporating illiquid and manually priced assets into systems designed for daily trading introduces a fundamental operational mismatch. These challenges demand thoughtful integration, robust investor education, and technology capable of managing complex private assets at scale.

Currently, mutual funds, the mainstay of 401(k) plans average fees of just 0.26%, compared to private equity’s traditional “2 and 20” fee structure. Beyond fees, alternative investments often lack standardized disclosures, making it harder for investors to track performance or understand the full cost of ownership. These factors, combined with the operational complexity of handling illiquid assets, create significant barriers for plan sponsors and recordkeepers.

For private asset managers and plan sponsors, this shift represents both an opportunity and a responsibility: the chance to access trillions of dollars in retirement capital, paired with the obligation to deliver transparency, manage risk, and ensure operational readiness.

At Allvue, we provide the technology infrastructure to help managers meet these challenges offering solutions that enable transparent reporting, rigorous compliance, and seamless operations across even the most complex alternative investment portfolios.

Read the full Reuters article here.