Alts in DC Lineups Gain Traction Among Plan Advisers

One-quarter of defined contribution plan advisers are likely to recommend the inclusion of alternative investments in defined contribution plans following the Department of Labor’s August policy shift, and another 10% already do so, according to Escalent’s “2025 Retirement Plan Advisors Trends” report.

The growing interest follows the DOL’s August decision to reverse its stance—set by the previous administration—on the suitability of alternative investments within 401(k) and other workplace DC plans. In addition to the DOL’s policy change, Trump’s August executive order led to the DOL reversal and has generally encouraged the take-up of alts in DC plans.

“Advisers have traditionally turned to alternatives as a diversification lever for high-net-worth and institutional clients,” said Linda York, a senior vice president in Escalent’s Cogent Syndicated division, in a statement accompanying the report. “The fact that so many advisers are advocating for the inclusion of alternatives within DC plans indicates just how quickly the market is changing.”

Among those responding to Escalent’s survey, 44% of national advisers and more than 35% of advisers managing at least $50 in assets under management showed a strong appetite for the asset class, saying they are either already recommending alternatives or are extremely likely to do so in the future.

Among alternative investment categories, 43% of advisers said they already or are likely to recommend private equity, followed by 42% for private credit, 39% for private real estate, and 32% for venture capital. These findings came from Escalent’s 2025 DC Participant Planscape, released in July.

While current demand for alternatives is high, continued growth will depend on how effectively providers support the features and structures advisers value most, according to Escalent.

When asked what would influence them to start recommending alternatives or increase current recommendations to plan sponsors, 38% of DC advisers cited lower fees, 34% cited client requests for inclusion, and 33% cited increased liquidity. Escalent data suggest that advisers are likely to field more requests for alternative investment options moving forward. 

“The DOL’s decision marked a turning point for the use of alternatives in workplace plans, and the market is still adjusting,” said Sonia Davis, a senior product director in Escalent’s Cogent Syndicated division and the lead author of both studies, in a statement. “We can expect DC advisors to seek out suitable options as client inquiries continue to expand. The firms that align their alternative offerings with advisors’ priorities will be in the best position to capture that momentum.”

The “2025 Retirement Plan Advisor Trends” report by Cogent Syndicated, a division of Escalent, was based on an online survey conducted from September 8 and September 9 among a representative cross section of 411 plan advisers. Surveyed participants were required to have an active book of business of at least $5 million and be actively managing defined contribution plans.