Report : Fiduciary Regulatory | February 06, 2026

Help employees get more for less with in-plan advice

Financial advice plays a critical role in investors’ outcomes—and its impact goes beyond the quality of the guidance itself. Fees directly affect net returns, and those costs can vary widely across providers. Faced with complex pricing structures and opaque service models, people often struggle to compare advice options and risk making suboptimal choices.

Offering advice within a retirement plan can simplify this process. In-plan advice leverages institutional pricing power and fiduciary oversight to deliver more comprehensive, competitively priced solutions that help participants achieve better long-term results.

Read our research
In a new research paper, Financial Advice Economics: What SEC Filings Reveal About Costs and Services, lead authors Nicky Zhang, Vanguard investment strategy analyst, and Fiona Greig, Ph.D., global head of investor research and policy, analyzed more than 26,000 advice offerings in the U.S.

In-plan advice tends to offer more and cost less

There are significant differences between retail financial advisory services and the advice employees can access via their retirement plans. In-plan hybrid advice services cost 18 basis points less, on average, than retail hybrid offerings (Figure 1). A regression analysis suggests that about 11 of the 18 basis points in cost savings are due to the advice being offered in the workplace retirement plan. For a hypothetical investment of $100,000, those 11 basis points could deliver an additional $22,000 over 30 years (assuming 6% annual returns and comparing a 0.61% advice fee with a 0.50% advice fee).2
In addition, in-plan hybrid advice options are more likely than retail options to go beyond core investment services. Advice within a retirement plan is typically more comprehensive, including financial planning, retirement income planning, and behavioral and advisory services (Figure 2).

Notes: This chart compares the percentage of workplace and retail hybrid advice offerings that include specific service categories, based on a generative Al analysis of 23,054 unique offerings. All values are asset-weighted to better reflect the prevalence of each service as experienced by end investors.

Sources: Vanguard calculations, based on 2023 SEC Form ADV Part 2 brochures. 

“With in-plan advice, participants benefit from their employer’s ability to identify services that are often more comprehensive and less costly than what they are likely to find in retail channels,” said Zhang.

Employer advantage

Employers play a critical role in shaping employee outcomes. Institutional pricing power tends to result in lower fees and secure comprehensive service packages that individual investors often cannot access in retail channels.

This advantage is reinforced by fiduciary oversight requirements under the Employee Retirement Income Security Act, which encourages employers to prioritize service quality and cost. As a result of their institutional pricing power and fiduciary responsibility, employers deliver advice solutions that cost less and offer more services than typical retail advice offers—helping participants achieve better long-term financial results.

A vetted option that can help drive retirement outcomes

Advisory fees vary dramatically. Our research found that 80% of hybrid advice offerings charge anywhere from $225 to $1,500 annually for an investor with $100,000. That’s more than a sixfold cost difference. Pricing structures are also increasingly opaque, making it harder for retail investors to compare services.

“Participants who rely on their own financial fluency and discernment to choose high-value advisory services—without their plan sponsor’s pricing power—may be at a disadvantage,” said Zhang. “With in-plan advice, employees can gain access to lower-cost and comprehensive services that have been vetted and approved by their plan sponsor.”

Learn more about the value of in-plan financial advice.

Sources

1Hybrid offerings include human advice and coaching in combination with digital tools.

2This calculation by the authors assumed that a $100,000 initial investment compounded annually over 30 years at a 6% gross return. The portfolio with a 0.61% annual fee grew to approximately $475,963, while the portfolio with a 0.50% fee grew to approximately $498,395. Rate of return is not guaranteed.

Notes

  • All investing is subject to risk, including the possible loss of the money you invest. We recommend that you consult a tax or financial advisor about your individual situation.