Jeff Benjamin at Daily Upside wrote about Wall Street's push to put private alternatives and crypto inside 401(k) plans, and asked advisers whether participants actually need them. I have spent the last two years fielding client questions about both, so my answer was direct.
I treat crypto as speculation, not diversification. The correlation story that justified it a few years ago has not held up, and Bitcoin was down almost 50% from its October high when we spoke. That does not mean nobody should own it. It means where you own it matters more than whether you own it. If a client wants crypto exposure, we size it so a total loss changes nothing about the retirement plan, and for most people that is low single digits.
Private alternatives are a different conversation, and liquidity is the part clients underweight. You are trading flexibility for a return premium that may or may not show up after fees. I had a client eyeing a fund with a multiyear lockup, and when we ran his actual cash needs, a tuition bill landed inside the lockup window. Nothing wrong with the fund. It just did not fit him.
A 401(k) is the account you are retiring on. It is the last place to experiment with something you cannot easily explain or easily sell.
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