ICI Urges Treasury to Open Trump Accounts to Competition

The Investment Company Institute urged the U.S. Department of the Treasury to adopt a competitive, flexible framework for implementing newly created Trump Accounts, tax-preferred savings vehicles created by the One Big Beautiful Bill Act. 

ICI argued that a “robust and competitive marketplace for account trustees and custodians” is essential to the program’s success. 

The goal of the accounts, in which funds saved cannot be spent until the child whose name is on the account turns 18, is to create funding for young adults to support key milestones, such as pursuing education, starting a business or buying a home. 

A pilot program provides $1,000 each to U.S. citizens who have a Social Security number and were born between January 1, 2025, and December 31, 2028.  

After the Senate made large changes to the program in its version of the Republicans’ tax bill, the accounts will work much like traditional individual retirement accounts. The accounts, per the law, are to go live on July 4, 2026, but it remains uncertain who will administer the accounts—firms that provide IRAs or the Treasury Department, which the law tasked with administering the accounts.  

In ICI’s October 29 letter to Treasury, the asset management trade association warned that requiring accounts to be opened only through a single, Treasury-selected provider “would undermine competition and discourage firms from committing resources to the program,” noting that “such an approach risks creating an uneven playing field and concentrating market power in ways that could distort the broader IRA and retirement services landscape.”  

As such, ICI’s 16-page letter called for Treasury to consider an open marketplace model and to use its authority to broaden the eligible investments for the accounts. It also called on Treasury to adopt cost-saving measures in implementing Trump Accounts. 

According to the text of the bill, the deposits in Trump Accounts are to be invested in stock mutual funds or exchange-traded funds that track either the S&P 500 or another American stock index. But the ICI letter called on Treasury to use its authority to expand eligible investments to include global equity index funds, for example. 

“Permitting investments in a broad array of U.S. and non-U.S. issuers allows account holders to use the benefits of diversification to better manage their risk preferences and potential growth opportunities across markets,” the letter stated. 

The organization further stated that such steps would “promote competition, consumer choice, and operational efficiency,” ensuring that Trump Accounts “benefit millions of Americans and set a strong precedent for future financial programs” 

In September, Monique Morrissey, a senior economist at the Economic Policy Institute, told PLANSPONSOR that the limitation of investing Trump Account funds into U.S. equities goes against traditional investment advice that prioritizes diversification. While she praised the creation of the accounts for its potential to introduce more families to investing, she warned that limiting the investments would be detrimental.  

“The accounts seem to be designed to make people fixate on the stock market,” she said. “They’re designed to make people see U.S. stocks as the most important thing in the economy, even as—ironically—the stock market represents a shrinking share of the overall economy.”