Retail investors "entering the market" or "entering the pit"? Is the US SEC's plan to open up private placements and crypto access a wealth opportunity or an information gap trap?

Notice that with the Trump administration and the Securities and Exchange Commission (SEC) pushing for market openness, American investors may soon have the opportunity to access more investment products related to private credit, cryptocurrency, and other asset classes. Some investment advisors say that this change will shift the responsibility of protecting their own interests too much onto individual investors. Under the leadership of SEC Chairman Paul Atkins, both the White House and SEC support providing investors with more choices to take advantage of certain asset classes that can offer high returns. The White House and SEC departments led by Chairman Paul Atkins advocate for providing investors with more choices to enter into some potentially high-yielding asset classes. However, some financial advisors warn their clients, especially those who typically invest in stocks and bonds, may not fully understand the new products that have already started emerging, and that market analysts predict will increase by 2026. Mark Stankato, founder of the registered investment advisory firm VIPWealthAdvisors in Decatur, Georgia, said, "Negative events will happen, and people will say, wait, I didn't realize I was taking on this kind of risk." He is concerned that investors may have difficulty making informed decisions, particularly when evaluating retirement assets. The SEC and the White House state that they remain focused on investor protection. White House spokesperson Taylor Rogers said, "Chairman Atkins is committed to ensuring that the SEC maintains fair, orderly, and efficient markets while protecting ordinary investors." She added that the U.S. remains the "best and safest" place to invest. An SEC spokesperson stated that the agency is focused on ensuring that investors have access to "robust information to make sound decisions on all new products." Atkins mentioned in a speech in September the need to relax access standards for private assets while also establishing appropriate "guardrails." A spokesperson from the Department of Labor stated that they will develop rules and guidelines for providing best practices to retirement investors on private assets and other alternative investments. "Do retail investors take on more risk, or do they get more returns?" In August, the Trump administration announced plans to make it easier for individual investors to access assets such as private credit and private equity, and asked the Labor Secretary responsible for overseeing retirement plans to negotiate with other agencies, including the SEC, within six months. Atkins stated in November that typical retirement investment tools (such as target-date funds) are missing exposure to these assets, putting investors at a disadvantage. Currently, 401(k) and other retirement plans provide exposure to listed assets such as stocks and bonds through mutual funds or ETFs. Opening up private equity or private credit investments can diversify returns, but it also raises questions about how these holdings are valued, the liquidity, and the quality of choices that individual investors have access to. The agency has also helped investors increase their investment channels in cryptocurrencies by introducing a general listing standard in September and expediting the launch of new ETFs, removing a barrier to the introduction of spot ETFs related to cryptocurrencies. Robert Pelcicchetto, a financial planner at Delagify Financial in Arvada, Colorado, said that new products may increase the risk for retail investors. He believes that retail investors have the least expertise in evaluating the risks of new or complex products but have the largest exposure to risks. Pelcicchetto said, "Retail investors... do not have a professional advisory team to serve them." According to Morningstar data, there has been an increase in the number of new cryptocurrency ETFs since the introduction of the general listing standard in September. Bitwise Asset Management recently predicted that there may be 100 related products coming by 2026. In addition, interval funds (closed-end funds that invest in private assets) have also increased, as they are seen to benefit from the openness of retirement plans. Morningstar analyst Brian Amer said, "I expect a large influx of funds holding private assets in 2026." While ETFs, interval funds, or target date mutual funds themselves do not represent high risk, the risk depends on the nature of the underlying assets. In fact, some market participants believe that providing more choices will benefit investors. Duncan Moyle, President of 21Shares, which has recently launched 6 cryptocurrency ETFs, said that cryptocurrency "can play an important role in portfolios." Bruno Sosa, Founding Partner of the cryptocurrency asset management company Hashdex, said that the capital market operates by providing people with "the information needed to make free and informed decisions."