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As DC Industry Shifts, Trust Becomes More Critical

According to research by Cogent Reports with DC plan advisors, trust is a more critical factor than ever when deciding which investment manager they work with.

Name brand money managers fared the best in the survey, consistent with last year’s findings.

Factors that engender trust, along with performance and value for the money, include:


  • Superior research and thought leadership

  • Financial stability

  • Understands the DC market


Linda York, SVP at Cogent, noted that trustworthiness includes “long lasting relationships, stability of the company and their public profile as well as support for the retirement industry and retirement readiness.”

As assets overall shift to index funds with a majority of new contribution going to TDFs, the separation between DCIOs doing well and those that are not is growing by the day. For the first time in their relatively brief history, DCIOs are retreating, with some exiting the market and others struggling to adequately support partners, creating some tough choices.

Advisors that have grown to depend on DCIOs and their local professionals to help them run their practice also seemed to be focused on the stability of the company and their trustworthiness more than ever, making it tougher than ever for new entrants.

The major impact of the DOL rule, according to advisors in the Cogent report, is a push to more fee based professionals.

Opinions expressed are those of the author and do not necessarily reflect the views of NAPA.

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