Callan’s Cost of Doing Business Survey Details Expenses for Institutional Investors

SAN FRANCISCO, Nov. 15, 2021 /PRNewswire/ — Callan, a leading institutional investment consulting firm, released the results of its 2021 Cost of Doing Business Survey, which reveals trends on 2020 expenses for 163 organizations with more than $975 billion in assets, including public defined benefit (DB) plans, corporate DB plans, and endowments and foundations. The goal is to illustrate common practices employed by institutional investors and to empower asset owners with objective information to help manage expenses.

Callan Logo (PRNewsfoto/Callan LLC)

Callan Logo (PRNewsfoto/Callan LLC)

Key Findings

Fees: 87% of expenses went toward external investment management fees, down 6 percentage points from 2015 (93%).

Future Changes: 44% of respondents plan to review and/or renegotiate fees over the next one to two years as their biggest change, whether it is custody fees (27%) or investment management fees (17%).

Total Expenses: 54 basis points was the average total of all expenses paid by institutional investors, a 5% decrease since 2015 and the first decline in the survey’s history.

Regulatory Impact: The Highway and Transportation Funding Act of 2014 had the greatest impact on expenses, representing a 30% higher score than the next highest-cited regulation (rules regarding the ongoing coronavirus pandemic).

Custody: 81% of respondents utilized global custody services for U.S. assets and sub-custody of non-U.S. assets.

“Average total fund expenses for asset owners in aggregate went down for the first time in the survey’s history,” said Ivan “Butch” Cliff, executive vice president and director of research. “This is not surprising given the ongoing compression of active management fees, along with the increased usage of passive management. The aggregate results, though, mask the major differences in fee trends across asset owner type and size, which is outlined in the survey.”

Callan emailed questionnaires to a broad sample of institutional fund sponsors in the U.S. (excluding defined contribution plans). Responses reflect data for calendar year 2020. Data was collected from November 2020 to June 2021. Callan compiled all responses in a database and supplemented them with qualitative analysis and industry information to yield the trends reported. In addition, observations were extracted from Callan’s proprietary database related to asset allocation, active and passive allocation, investment manager count, and investment management fees.

Callan published similar surveys in 1998, 2002, 2005, 2009, 2013, and 2016. Throughout this report, we comment on relevant differences between the 2020 survey and previous surveys.

Find the summary blog post and survey here.

About Callan
Callan was founded as an employee-owned investment consulting firm in 1973. Ever since, we have empowered institutional clients with creative, customized investment solutions backed by proprietary research, exclusive data, and ongoing education. Today, Callan advises on more than $3 trillion in total fund sponsor assets, which makes it among the largest independently owned investment consulting firms in the U.S. Callan uses a client-focused consulting model to serve pension and defined contribution plan sponsors, endowments, foundations, independent investment advisers, investment managers, and other asset owners. Callan has six offices throughout the U.S. Learn more at

Media Contact:
Elizabeth Anathan
[email protected]



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