This shift in the hiring and firing of managers is in context of a broad move by plan sponsors to boost returns in a low-return environment, Ms. Bewick said.
"Plan sponsors understand they have a whole new landscape and need to be open to new strategies in both traditional and non-traditional spaces," she said. "They are looking at whatever they can find to close the gap between assets and liabilities."
Chris Meyer, chief investment officer at investment consultant Fund Evaluation Group, Cincinnati, said greater flexibility toward money managers could help plan sponsors close that gap.
"If a manager is skillful in stock selection and they can move between growth and value, why limit them to (investing in) nine style boxes that Morningstar or a consultant came up with?" he asked. "You might go one step further and allow them to short or use derivatives if they're truly skillful at identifying stocks that are going to outperform or underperform."
He said that given the current low-return environment, plan sponsors need to diversify their assets to meet their return goals.
"Plan sponsors are looking to expand alpha opportunities," he said. "The best thing to do is to diversify as much as possible so they don't have all their eggs in the traditional baskets of U.S. stocks and bonds."
But David Katz, a partner at Rocaton Investment Advisors LLC, Norwalk, Conn., said greater flexibility by plan sponsors could be a double-edged sword.
"On the one hand, I agree that flexibility is the key," he said. "If you are hiring smart people with some sort of value-added or unique insight, then you want to give them room to do what they do best. That aside, you don't want a manager to change stripes and you want to make sure they're appropriately benchmarked."
Both consultants agreed that plan sponsors taking longer to terminate managers made sense.
"We have always encouraged clients to be thoughtful about terminations," Mr. Katz explained. "If there's a period of underperformance — even significant underperformance — but if all the reasons why you hired that manager are still true, termination may not be warranted."