Opening the Door: Advisors, Alt Assets and DC Plans

MarketFacts Home

Author

Deb Dupont
Assistant Vice President Workplace Benefits Research, Institutional Retirement
LIMRA and LOMA

April 2026

Advisors who specialize in DC plans (with DC accounting for 50% or more of practice income) represent about 20% of our sample, while those who have more limited DC activity (less than 20% of income derived from DC) are roughly half (49%) of our sample. Segmenting advisors by their DC practices provides an important lens for understanding their perceptions of engagement with alts. The survey referenced in this article was fielded in the fourth quarter of 2025 to advisors who sell or service at least one DC plan.

We’ve seen headlines about the inclusion of alternative investments — and asset classes — (alts, collectively, for the purposes of this discussion) in defined contribution (DC) plans. Proponents say that including these investments will “democratize” DC plans. They also say that doing so opens up new investment markets to investors who might not otherwise have access to them — the inference being that the average investor likely doesn’t have the level of investable assets or access to professional guidance required for individual investment in these markets — such as private equity and credit.

This is not dissimilar to the way DC plans — especially 401(k)s — were originally touted as opening up traditional asset classes and investments through mutual funds and similar fund investment options.

Advisors’ Influence

In a DC environment, plan sponsors serve as the filter for plan offerings, and the plan’s financial advisor is highly influential — and often more than simply influential, functioning as an active gatekeeper — regarding what’s available in the plan.

In most cases, adding alts to the mix will require advisor cooperation and buy-in. More than any other plan resource and vendor, DC plan sponsors rely on their plans’ advisors to keep them informed about regulatory and similar changes and developments that affect their DC plans.

On August 7, 2025, President Trump signed an executive order, “Democratizing Access to Alternative Assets for 401(k) Investors,” to open DC plans to alternative assets.

At this point, the majority of advisors are not familiar with the president’s executive order — just 39% rate themselves “familiar” or “very familiar” in a late-2025 LIMRA survey of 160 DC advisors (Figure 1). Conversely, 79% of DC specialist advisors give themselves top scores for their knowledge of the order. This drops to 22% for advisors with just an occasional focus on DC plans.

Figure 1. DC Advisor Familiarity with Executive Order on Alts in DC Plans

Combined Responses of Familiar and Very Familiar

Knowledge by Asset Class

Advisor self-assessed knowledge of common alt asset classes likely to be considered in scope for future DC menus — such as private equity and debt, and cryptocurrency (crypto) — is relatively low (Figure 2). Just half give themselves top marks for their knowledge of private equity and credit; still fewer (31% overall) do for crypto. Most, however, are familiar with real estate — also in scope for potential DC inclusion — as an asset class.

Knowledge of these asset classes generally increases with the advisors’ practice focus on DC.

Figure 2. DC Advisors and Alts: Knowledge and Appropriateness for DC Plans

Combined Responses of Knowledgeable or Very Knowledgeable – Turquoise bar
Combined Responses of Appropriate or Very Appropriate – Yellow bar

From Understanding to Adoption

There is a strong connection between understanding an asset or asset class and considering that category to be appropriate for DC clients and plans. Increased understanding generally correlates with increased receptiveness to considering an asset strategy appropriate for DC plans. Still, understanding an asset class does not unilaterally mean an advisor feels that it is appropriate for DC plans.

Within the universe of the asset categories discussed in this article, advisors are most accepting of real estate as appropriate for DC plans — probably not coincidentally, this also is the asset category for which they are likely to express the highest knowledge level.

Overall, it is specialist advisors who feel that alternative investment categories are suitable for DC plans.

Still, it bears noting that, at best, only half of DC advisors feel they have a good understanding of private equity and private credit as asset classes, and significantly fewer believe these investment strategies should be part of DC plans. The advisor outlook and assessment of crypto is even more limited — with slightly less than a third of advisors feeling they understand this asset class, and significantly fewer feeling that it should be part of DC plans. And while they are more open to the role of real estate, still just 6 in 10 overall say it’s appropriate for a DC plan.

For comparison and context, respondents were asked to assess the appropriateness of publicly traded investments and asset strategies for DC plans (listed percentages reflect those that ranked each option among their top two of five choices):

Domestic, publicly traded equity: 95% (versus 30% for private equity)
Domestic, publicly traded credit/income/bonds: 92% (versus 30% for private credit)
Domestic/government debt (Treasuries, etc.): 84%
Foreign equities: 79%
Foreign credit/debt: 60%

The gap between understanding these more traditionally used asset classes and considering them appropriate for DC plans also is significantly narrower than the understanding–appropriateness gap for the alternative asset-class strategies suggested in the research.

The Path Forward

Advisors are reluctant to say that an asset class about which they have low or limited knowledge has a place in DC plans. Given the importance of the advisor in guiding plan sponsors — especially in the design and management of investment menus — for alts to gain traction in this industry will require more robust and extensive advisor engagement. This may, in turn, require robust education and analysis tools — an opportunity for both asset managers and record keepers (and possibly other stakeholders).

The discussion begins here — with understanding how advisors comprehend and view these types of investments in the context of their DC plans. Digging deeper, our survey explores advisor assessment of specific alt characteristics, as well as how advisors see these investments and strategies fitting into DC menus and investment options. Education, training and tools that address these specifics can help advisors respond, leading to meaningful conversations and investment strategies that best meet the needs of both plan sponsors and participants.

0264-2026_MF_April_Cover Images_480x270.png