Private Markets Gain Ground in DC Plans; But Education, Legal Clarity Remain Hurdles
As defined contribution (DC) plans evolve to meet the long-term needs of participants, private market investments are beginning to emerge as a viable addition to the retirement toolbox. While already a mainstay in defined benefit plans, endowments, and foundations, private markets are now garnering serious interest from DC plan advisors looking to enhance diversification, mitigate volatility, and access differentiated return streams.
To better understand this shift, the NAPA Advisor Research Institute (NARI) surveyed over 250 advisors representing $473 billion in DC assets and 6.6 million participants. The findings reflect cautious optimism—and signal a clear need for advisor education and regulatory guidance.
Advisors Engaging, Slowly but Surely
While just 5% of advisors currently allocate to private markets within their DC plans, 22% plan to do so in the future. In total, 40% believe private markets are appropriate for at least some of their plans. Notably, advisors who also serve individual wealth clients are more likely to push for adoption in the retirement space, seeing it as a natural extension of strategies already deployed in high-net-worth portfolios.
Among advisors with experience in private markets, 50% are already incorporating or planning to incorporate these strategies into their DC lineups—underscoring the link between familiarity and implementation.
Potential Benefits: Diversification, Returns, Income
The appeal of private markets is rooted in fundamentals. According to the survey, 67% of advisors rate diversification as either “very important” or “somewhat important” when evaluating these investments for DC plans. Many also cite the potential for enhanced returns, lower volatility, and even income generation—features increasingly sought after in an era of prolonged public market uncertainty.
Advisors also view private market access as a differentiator. Many respondents agreed that offering such exposure helps position their practice as innovative and gives them a compelling reason to engage plan sponsors.
Knowledge Gaps Undermine Adoption
Despite growing interest, most advisors acknowledge significant knowledge gaps. Only 32% report a high or moderate understanding of private markets overall. Familiarity with specific aspects—such as solution providers, pricing mechanics, and product structures—is similarly low.
Interestingly, advisors are more fluent in the risks than the benefits. The “risks of private markets” scored highest in terms of advisor understanding, while “benefits” ranked lowest. This knowledge imbalance suggests that concerns may be dominating the narrative, dampening enthusiasm for broader adoption.
Fiduciary Concerns, Illiquidity Top List of Barriers
Two key concerns emerged from the survey: legal risk and liquidity. Advisors want more clarity from the Department of Labor (DOL) around fiduciary obligations when incorporating private markets into qualified plans. In the absence of such guidance, many are hesitant to introduce non-traditional assets to retail retirement investors.
Liquidity—or the lack thereof—is also a sticking point. Advisors worry that illiquid investments could impair participants’ ability to access their funds when needed, creating potential administrative and communication challenges.
What Advisors Can Do Now
As product innovation advances and interest grows, advisors can take several steps to prepare their practice and clients:
- Attend CE courses and webinars to help build fluency in the risks and benefits of private market investments.
- Initiate conversations with their clients about their long-term portfolio needs and how private markets may benefit them.
- Conduct in-depth due diligence on their partners.
- Collaborate with their asset manager to create participant-friendly materials that clearly and concisely explain private market investments.
By taking these steps now, advisors can build the foundation for future adoption and help position their firms as forward-thinking leaders in the evolving DC plan landscape.
A Turning Point for DC Plans?
Private markets are gaining momentum, and the path to inclusion in DC plans is slowly taking shape. Asset managers are developing vehicles tailored to retirement investors, such as collective investment trusts and interval funds, which may help bridge the gap between institutional benefits and participant needs.
For advisors and firms trying to stay competitive, now is the time to invest in learning about private markets and client education. As regulatory clarity improves and product innovation continues, private markets could play a critical role in shaping the next generation of retirement strategies.
About the survey: From March-May 2025, the NAPA Advisor Research Institute (NARI) conducted an online survey to which 253 advisory practices responded, representing over $473 billion in DC assets and 6.6 million participants. The 253 respondents have on average $2 billion in AUA, 166 plans and 31,000 participants. Meketa Capital LLC was a NARI Survey Sponsor.
SEE ALSO:
• Warren Pushes Back on Empower’s Response to Private Market Exposure
• Trump Mulls Executive Order to Allow Private Equity in 401(k)s
Disclosures
Past performance is no guarantee of future results, and the opinions presented cannot be viewed as an indicator of future performance. Private market investments are complex, speculative investment vehicles and are not suitable for all investors. An investment in a private market investment entails a high degree of risk and no assurance can be given that any private market investment objectives will be achieved or that investors will receive a return of their capital. This document is for general information and educational purposes only and must not be considered investment advice or a recommendation that the reader is to engage in, or refrain from taking, a particular investment-related course of action.
All information contained in this document is provided “as is,” without any representations or warranties of any kind. We disclaim all express and implied warranties including those with respect to accuracy, completeness, timeliness, or fitness for a particular purpose. We assume no responsibility for any losses, whether direct, indirect, special, or consequential, which arise out of the use of this article.
Meketa Capital is an investment advisor registered with the U.S. Securities and Exchange Commission. Additional information about Meketa Capital LLC is available at https://adviserinfo.sec.gov./
Michael Bell is Chief Executive Officer, Meketa Capital and the founder and CEO of Primark Capital. He has more than 25 years of experience in the investment management and wealth management industries. Prior to Primark, Bell built and was the CEO for a $12 billion RIA, managing more than 30 investment strategies and a $10 billion liquid alternative mutual fund complex that launched more than 50 alternative funds. Most recently, he purchased, grew, and sold a family office-backed $6 billion RIA. Also, he specialized as a corporate finance attorney for Latham & Watkins and was a CPA for KPMG. Bell holds a Bachelor of Science in Commerce from the University of Virginia and a Juris Doctorate from West Virginia University.
