Alternative Allocations: Expanding DC plans—the role of private markets with guest Patrick Arey, Empower

In the evolving landscape of investment strategies, the integration of private markets into defined contribution (DC) plans is a burgeoning trend. Historically dominated by defined benefit (DB) plans, private market investments are now being cautiously embraced by DC plans as advisors seek to replicate successful DB practices. However, this transition comes with challenges such as liquidity concerns and fiduciary responsibilities that necessitate robust advisor involvement and investor education.

Empower’s Patrick Arey highlights how advisors play a crucial role in navigating these complexities, ensuring that both plan participants and fiduciaries are well-informed about potential risks and rewards. Recent surveys indicate growing comfort among advisors in recommending private market strategies for retirement plans, signaling a shift towards more diversified portfolios within the DC space. As larger allocations become more common in substantial plans, financial professionals must remain vigilant to balance opportunities against inherent risks effectively.