Large Plan Sponsors Highly Satisfied With Advisory Services

Large plan sponsors reported high satisfaction with investment advisory services overall in the 18th annual Callan Institute 2025 Defined Contribution Trends Survey, conducted in late 2024.

Financial wellness offerings received the highest satisfaction levels, with 95% of respondents saying they were either very or somewhat satisfied. One-on-one advisory services had the next-highest satisfaction rate at 94%. Managed accounts received the most dissatisfaction, though still relatively low, with 15% of respondents expressing some level of dissatisfaction.

All participating organizations reported offering some form of investment guidance, reinforcing plan sponsors’ increasing emphasis on participant support. Most of the 89 respondents oversaw large plans, with 91% of respondents managing at least $200 million in assets and 67% classified as mega-plans with at least $1 billion in assets.

Scaling Back Advisory Services

According to the survey, some plan sponsors have eliminated—or are considering eliminating—investment guidance and advisory services. The most-cited reason was a belief that target-date funds offer similar diversification at a lower cost. The second-most-common reason was that these services were too costly for participants. Other reasons included low participant demand and utilization, as well as concerns about the current litigation environment.

Recordkeeper consolidation continues to shape the industry. Fidelity remained the most widely used recordkeeper, according to the survey, followed by Empower, Alight, Charles Schwab and Voya. Together, the five providers were used by 80% of survey respondents. Additionally, nearly 60% of respondents reported that their recordkeeper also provides trust and custody services for their defined contribution plan.

Managed Accounts Dip Slightly

Despite a slight decline from 2023 levels, the use of managed accounts in 2024 remained well above 2017 levels. These services cater to “do-it-for-me” participants who seek greater personalization—an approach that tends to increase the perceived value of advice. In 2024, more than half of respondents offered managed account services.

Of those offering managed accounts, according to the survey results, 74% said they monitor or benchmark the outcomes of these services. Another 11% said they plan to begin monitoring in the future, while 14% reported no plans to do so. Among those conducting oversight, more than 90% said they review fees and services, and more than 80% reported tracking participant usage and engagement.

In most cases, participants pay for investment advisory services either specifically or bundled into recordkeeping fees. Only 11% of plan sponsors reported covering the full cost of these services on behalf of participants.