2024 Defined Contribution Consultant Study
Discover key insights from T. Rowe Price’s fourth annual study that captures views from the U.S. DC consultant and advisor community.
2024 Participating Firms
The 35 firms that participated represent over $7.5 trillion in AUA.1 The study was fielded from January 12 to March 4, 2024.
Aon | Buck, A Gallagher Company | Callan LLC | Cambridge Associates | CAPTRUST | Cerity Partners | Clearstead | Commonwealth | Curcio Webb | Fiducient Advisors | Francis Investment Counsel | Goldman Sachs Asset Management | Higginbotham | Highland Associates | Highland Consulting Associates, Inc. | HUB RPW | LCG Associates, Inc. | Marquette Associates, Inc. | Meketa Investment Group | Mercer | MSWM/Graystone | NEPC | Newport Group, Inc. | NFP Retirement | OneDigital | QPA | Russell Investments | RVK, Inc. | SageView Advisory | Segal Marco Advisors | UBS | USI | Verus | Wilshire | WTW
Key Insights
This study covers four broad retirement-related themes: target date solutions, retirement income, investment trends, and financial wellness programs. In 2024, we also explored new topics of inquiry, including views on managed accounts, alternative investments, and the value of active versus passive management.
A focus on fees shines light on collective investment trusts (CIT) and blend target date solutions. And managed accounts have a potentially expanding role, but are unlikely to be assigned as the qualified default investment alternative (QDIA).
Target date solutions offered in a CIT vehicle and constructed with both active and passive strategies were the most strongly supported development, enhancement, or modification related to target date solutions or other qualified default investment alternatives. Consultant and advisory firms indicated that their plan sponsor clients are most likely to offer managed accounts as an opt-in option on the investment menu.
More plans are taking a stance on retirement income, and there is a preference for multi-asset, total portfolio solutions with retirement income as a component.
The top five most appealing strategies or solutions for the delivery of retirement income include simply systematic withdrawal, managed account (with income-planning feature), target date investment with managed payout feature (non-insured), standalone managed payout investment, and target date investment with embedded annuity feature.
Higher rates likely to spur increased fixed income and capital preservation activity.
Consultants and advisors are most focused on identifying opportunities for diversification within fixed income as an asset class. Furthermore, the current interest rate environment and expectations for how it may change are cited as top areas of interest.
Active and passive investment beliefs evolve, the industry considers alternative investments, and environmental, social, and governance (ESG) challenges continue.
Primary drivers of increased use of passive management are focused on cost and fear of litigation. Despite discussion in the marketplace, results suggest that it is unlikely alternatives will become broadly offered in DC plans. Over two-thirds of respondents say ESG integration is the best method of implementation within DC plans. But the evolving regulatory and legislative development remains challenging.
Financial wellness findings: Accumulation savings goals are most important, but emergency savings is a topic of increasing emphasis.
Consultants and advisor firms were asked to rate which financial wellness topics matter most to plan sponsors, and results point to continued emphasis on accumulation- or savings-focused goals, such as determining how much to save and measuring progress against this goal. Building an emergency savings reserve also rose to the top as “very important.”
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1 Assets under advisement figures are self-reported.
202408-3807995
