Private equity’s influence on service sectors—from emergency response to healthcare—has revealed a troubling pattern: quality can suffer when profit extraction takes precedence. This same model is now permeating the defined contribution (DC) consulting space, where private equity (PE)-backed roll-ups and shifting policy stances are changing how retirement plans are advised and constructed.
Why Should Fiduciaries Pay Attention?
Fiduciaries must scrutinize ownership structures, compensation models, and product incentives or risk exposing participants to degraded outcomes. As private equity reshapes the retirement advisory landscape and policy shifts open the door to more complex investment options, fiduciaries face a growing responsibility to look beyond surface-level service. Ownership structures, incentive models, and fee flows can subtly, but significantly, impact participant outcomes.
What Can We Learn from Other Service Sectors?
Research from the University of Iowa shows that after private equity acquired major ambulance providers, layoffs of paramedics, longer response times, and increased traffic-fatality rates followed. Healthcare studies echo this theme, with PE ownership most consistently associated with higher costs and mixed to harmful quality effects. The parallels for retirement plans are clear: when ownership and compensation structures prioritize distribution or short-term EBITDA over participant outcomes, the risks may not be immediately visible, but they echo familiar patterns.
How Is the DC Landscape Changing?
Industry consolidation and PE ownership are accelerating in the advisory and consulting channel that influences plan menus, fees, and rollover flows. Recent transactions include SageView Advisory Group, CAPTRUST, and OneDigital, all involving private equity investment and acquisition strategies. At the same time, public policy positions have shifted, with the Department of Labor’s 2025 rule rescission signaling a friendlier stance toward alternatives in 401(k)s.
Four Fiduciary Risk Channels to Watch
- Conflicted Advice & Product Shelf Bias: Pressure to cross-sell affiliates or steer toward higher-margin vehicles.
- Fee Opacity in Roll-Ups: Complicated fee flows across affiliates and third parties.
- Service Erosion Post-Acquisition: Leaner client teams and turnover may impact service quality.
- Menu Creep Into Alternatives: Increased marketing of PE components in target-date or balanced funds, with higher fees and limited liquidity.
What Should Sponsors and Committees Do Now?
- Map the money: Request a Schedule C-style fee map covering all compensation streams.
- Question ownership and incentives: Ask who owns your advisor/consultant and about sponsor return timelines and growth targets.
- Monitor staffing and turnover: Track staffing ratios, experience levels, and turnover in provider RFPs and ongoing reviews.
The guide also includes six RFP (or monitoring) questions to surface PE pressure, such as ownership disclosure, compensation streams, product shelf governance, staffing details, revenue-sharing arrangements, and conflict-of-interest policies.
Download the full guide to learn more about how private equity is reshaping the retirement advisory landscape, the risks to participant outcomes, and the steps prudent sponsors and committees can take to stay vigilant and demand transparency.
Multnomah Group is a registered investment adviser registered with the Securities and Exchange Commission. Any information contained herein or on Multnomah Group’s website is provided for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and, unless otherwise stated, are not guaranteed. Multnomah Group does not provide legal or tax advice.