Background:

In late 2025, DCIIA’s Retirement Research Center (RRC) team interviewed 21 retirement plan advisor firms and consultancies to better understand how key stakeholders are thinking about the evolving retirement ecosystem. Each discussion explored three areas shaping today’s defined contribution (DC) landscape: private markets, managed accounts, and retirement income solutions.

Across conversations, we examined both the opportunities and the headwinds associated with these offerings—focusing on fees and costs, participant outcomes, engagement levels, benchmarking considerations, and the pace of innovation.

Each of these topics are included as stand-alone deeper dive projects on the RRC’s research agenda for 2026; RRC members are encouraged to join working groups for these and other projects here.

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Findings:

Managed accounts: personalization remains key value proposition, fees remain relevant

Personalization continues to be the defining value proposition of managed accounts. Plan consultants and advisors consistently cited tailored portfolio construction as the primary benefit, with both human and digital advice capabilities reinforcing the appeal.

At the same time, fees remain the central concern. Nineteen of the 21 interviewed firms indicated that participant fees typically fall within the 25–50 basis point range—which is down considerably from years past; however, litigation concerns remain. Respondents also pointed to muted participant engagement and enrollment levels—cited to be generally below 50%—as persistent challenges.

Looking ahead, plan advisors and consultants see meaningful innovation on the horizon. Artificial intelligence is expected to significantly enhance the participant experience. Some also raised the possibility of re-enrollment into a plan’s existing QDIA after a defined period when managed accounts are used in a hybrid-QDIA framework. Others suggested that tiered or reduced fee structures for younger participants could help drive broader adoption over time.

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Private Markets: curiosity abounds—tempered by practical constraints

Interest in private markets remains strong, but most plan sponsors remain in an evaluation phase. Plan advisors and consultants reported that while the potential diversification and higher returns are widely recognized as a theoretical benefit, many plan sponsors are not yet prepared to move forward.

Litigation concerns—which can stem from many underlying issues like illiquidity, fee levels, historical performance dispersion, limited track record, and operational challenges regarding daily valuation requirements— continue to be the primary obstacle to adoption. Despite these challenges, plan advisors and consultants are not dismissing private markets outright. Rather, they are recommending thoughtful, strategic implementation—particularly for larger, more sophisticated plans with familiarity with illiquidity (such as those with a defined benefit plan). The preferred approach often involves embedding a diversified private asset sleeve within a professionally managed solution, typically at a 5–10% allocation.

Among asset classes, private real estate was viewed as the most accessible entry point, given its longer track record and familiarity. Private credit followed due to cited similar product structures as private real estate. Private equity, by contrast, was considered more difficult to implement, with allocations generally smaller (e.g., 3–5% as a potential small-cap replacement) unless incorporated as part of a broader diversified exposure.

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Retirement Income: limited demand from participants and plans, for now  

When it comes to retirement income solutions, demand remains limited—for now. Plan advisors and consultants reported limited interest from plan sponsors, many of whom are reluctant to assume additional fiduciary responsibility for vetting and monitoring income products. There is also a perception of limited participant demand.

Embedding income features within target-date funds (TDFs) appears more palatable than offering standalone annuity products. Even so, few plans are actively inquiring about TDFs with guaranteed income components at this stage.

Usage overall remains limited, though many respondents emphasized that these products are still relatively new. There is broad expectation that retirement income solutions will become more common as familiarity grows—particularly as Generation X and Millennial cohorts approach retirement. Given that these generations are less likely to have access to defined benefit plans, plan advisors and consultants anticipate increased reliance on in-plan income solutions in the years ahead.

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Bottom Line:

As the defined contribution system continues to mature, innovation is accelerating—but adoption remains deliberate. Our discussions suggest that while personalization, private market exposure, and retirement income solutions are firmly on the industry’s radar, careful implementation, fee sensitivity, and fiduciary considerations will continue to shape the path forward.

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‍This Research Minute was written by DCIIA’s Retirement Research Center (RRC). The opinions expressed in this material are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual.

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