Adviser 401(k) Compensation Continues to Decline

The 26th edition of the “401(k) Averages Book,” released Monday, found that investment fees have continued to decline across all 401(k) plan sizes. The benchmarking book also found that, on average, adviser compensation declined 0.01% from 2024 to 2025.

Smaller plans pay higher adviser compensation, as the benchmarking book found a $5 million plan would offer 0.37% in adviser compensation, while a $50 million plan would pay 0.16%.

Joseph Valletta, the guidebook’s author, told PLANADVISER in an email that some of the smaller plans with fewer than 50 participants saw declines in adviser compensation of 0.01% to 0.03% between 2024 and 2025, while midsize to large plans saw compensation rates stay flat or decline by 0.01%. None of the plan scenarios resulted in increased adviser compensation.

The “401(k) Averages Book” publishes scenarios in which hypothetical plans of 50 people have varying average account sizes. The latest edition found that smaller plans consistently pay more than larger plans. A $5 million plan averaged 1.04% in total plan costs, while a $50 million plan was only charged an average of 0.72%.

A 50-participant plan with $5 million in assets—$100,000 per participant—would have paid 0.96% in plan costs in 2025, down from 1% in 2024. The 2025 costs break down to 0.78% for investment fees and 0.18% for recordkeeping administration.

A similar plan with $2.5 million in assets—$50,000 per participant—would have paid 1.17% in 2025, down from 1.21% in 2024. The 2025 costs break down to 0.88% for investment fees and 0.29% for recordkeeping administration.

If the plan had $500,000 in assets—$10,000 per participant—costs would have been 2.3% in 2025, down from 2.32% in 2024. The 2025 costs break down to 1.15% for investment fees and 1.15% for recordkeeping administration.

International equities were the costliest investment asset for all three plan sizes—1.36% for small plans, 1.1% for medium and 0.99% for large. Stable assets were the least expensive asset class—1.01% for small plans, 0.73% for medium and 0.63% for large.

Sister publication PLANSPONSOR’s 2025 Defined Contribution Survey, which incorporated responses from 4,387 plan sponsors from a wide variety of U.S. industries, found that on average, 42.8% of respondents spent less than 0.25% on average asset-weighted expense ratios on investment options. Another 37.5% spent between 0.25% and 0.50%; 12.6% of respondents spent between 0.5% and 0.75%; 4.1% spent between 0.75% and 1%; and only 3% spent more than 1%.

“Fiduciaries have a responsibility to understand and evaluate all components of plan fees, not just investment costs, but recordkeeping and adviser compensation as well,” Valletta added in a statement. “Benchmarking is one of the most effective tools available to support that process.”