NPR: The Indicator From Planet Money - The Prudent Man Rule
Jasmin explains that the Department of Labor’s stance on crypto in 401(k) plans is not a new rule or prohibition, but guidance urging fiduciaries to be cautious given the significant risks involved. She highlights key concerns such as the lack of consistent and reliable valuations for crypto assets and the absence of clear legal protections for investors if problems arise, including losses or hacking. From a regulatory perspective, she notes that the government wants to avoid situations where widespread losses lead participants to ask why they were not protected. Jasmin frames the issue within the modern “prudent investor” standard, emphasizing diversification: some risk can be acceptable if it represents only a small portion of a well-balanced portfolio, with crypto falling into the broader category of speculative alternative assets rather than core retirement investments.
