The Department of Labor is getting out of crypto’s way in 401(k) plans.

The agency on Wednesday changed its tune about bitcoin and any other digital asset being included in employer-sponsored retirement plans. It rescinded guidance from 2022 that directed plan fiduciaries to use “extreme care” when considering crypto. While that didn’t forbid digital assets in 401(k)s, it didn’t exactly help the cause. Now, the DOL says it is taking a neutral stance on crypto. The Employee Retirement Income Security Act “does not prohibit any types of investments,” said Fred Reish, partner at law firm Faegre Drinker Biddle & Reath. “The prior guidance didn’t say that crypto investments were prohibited, but conveyed that it was dangerous for fiduciaries to allow crypto investments in a plan’s core lineup or even in a brokerage window. That had a chilling effect on plan sponsors.”

Who Wants Some?

Options for including crypto to any extent in 401(k)s are thin. That may change, but plan sponsors are often hesitant to do anything with their investment menus that makes them stand out in any way. And that’s not just for fear of regulators — there has been no shortage of class-action lawsuits involving 401(k)s and their investments. “The majority of plan sponsors would never consider adding crypto into a retirement account anyway. That’s the good news,” said Knut Rostad, president of the Institute for the Fiduciary Standard. “The bad news is that this has been a clear message that the proponents can use for pushing crypto into these accounts in situations where the advisor is uncertain about whether he or she should do it. It’s exchanging a yellow caution light, which we had before, with a green.”

There are a few existing options for retirement accounts:

• ForUsAll, a consultant and record keeper, added a 401(k) feature in 2021 that allows workers to allocate up to 5% of assets and contributions to various digital assets through Coinbase Institutional. That firm did not immediately respond to a request for comment about the uptake within 401(k)s.
• Fidelity for several years has offered workers within its own company plan access to a bitcoin fund. The company, which this year rolled out crypto investing for IRAs, also did not immediately provide comments.

A Case for Advisors. As popular as crypto has become, it’s likely that many people on 401(k) investment committees haven’t held or invested in it. That can be a problem, because the law requires fiduciaries to be competent and knowledgeable about the investments they select, Reish said. “However, that ‘deficiency’ can be cured by the use of a knowledgeable consultant or adviser,” he said. Even so, any plans that opt for digital assets may limit the exposure to an allocation product or service, such as a target date fund or managed account, he said. “On the other hand, plan fiduciaries may allow crypto investments to be included in their plans’ brokerage windows.”

They say there’s strength in numbers.

Nonprofit financial services group Thrivent aims to hire nearly 600 wealth managers by the end of 2025, which would see the Christian-faith-based organization increase its advisor pool by 2% this year. The industry average growth rate is at just 0.3% and has remained flat over the past decade, according to McKinsey & Co. Thrivent, along with some of its competitors, is setting lofty, competitive recruitment goals to meet growing client demands.

“We’ve always been open for business, but this push is more about meeting the moment,” said Nick Cecere, Thrivent chief distribution officer. While there is a shrinking pipeline of financial advisors, there’s also a rising demand for financial guidance from younger clients, he added.

Man Your Battle Stations

The industry is currently facing an advisor shortage, and it’s only supposed to get worse. McKinsey predicts firms will be short more than 100,000 wealth managers by 2034. “The war on talent is absolutely here, and we see ourselves ready to lead,” Cecere told Advisor Upside, adding that talent movements in the industry have become “tectonic” as more and more advisors reach retirement:

• Thrivent currently has 3,200 client-facing advisors, and is looking to attract experienced advisors as well as those who are new to the industry.
• The organization aims to expand its regional offices in Atlanta, Dallas, Milwaukee, and Minneapolis, where advisors can remotely service clients across the country.

“We anticipate this competitive market will continue for a while and we’re investing in growth to meet client needs,” Cecere said.

Poached Eggs. Thrivent hasn’t specifically mentioned targeting free-agent advisors in the wake of LPL Financial’s buyout of Commonwealth, but the timing of its announcement coincides with other firms’ efforts to poach talent away from the nation’s largest independent broker-dealer.

Cetera President Todd Mackay published an open letter urging Commonwealth advisors to join his company, and Ameriprise has been meeting with advisors across the industry, including those from Commonwealth.

Volatility may be the defining word from the first half of 2025, but ETF investors just aren’t flinching.

Despite ongoing economic uncertainty and trade war tensions, ETFs attracted record inflows in the US. So far this year, investors poured $427 billion in new assets into ETFs, far surpassing the $301 billion over the same period last year, according to Morningstar. Much of this has flowed into equity ETFs as investors look to buy the dip, but diversification still remains key for advisors and their clients.

“The appetite for funds has not wavered,” said Bryan Armour, director of ETF & passive strategies research at Morningstar. He said it’s also a good time to increase bond exposure with TIPS ETFs, or consider alternatives like gold funds. “No one knows what’s going to happen next, and there’s a lot that’s up in the air economically right now.”

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