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DCIO Hiring Slowing Down

There’s a fundamental change happening at DCIO firms, highlighted by a recent Ignites Research report on trends in DCIOs' staffing strategies.

With some firms experiencing outflows, Ignites Research Director Loren Fox notes that for the first time in awhile, very few firms are expanding their external sales force, relying more on internals and other specialists. The good news for the so-called “elite” plan advisors (those with +$250 million in AUA, 10 or more plans, and 10 years or more of experience) is that there is no indication of less support for them, and that will likely not be diminished by the impending DOL conflict of interest rule.

Based on surveys of 17 DCIO firms as well as advisors from the FT 401 list, 47% of DCIO personnel are devoted to supporting advisors, yet only about a quarter (29%) of the firms responding are increasing the number of external sales professionals. While some firms are doing well, especially those that have viable TDF and passive strategies, that rising tide is not lifting all boats, according to Fox. As a result, compensation for some firms is focused on retention of assets — although Fox does not believe that the DCIO is maturing, with the emphasis still on top-line or new sales rather than bottom-line or net inflows.

Fox believes that DCIO firms are trying to be more strategic with advisors who don’t really believe that DCIOs understand what they need. In fact, just 38% of advisors think that DCIOs usually understand what they want, 56% think they sometimes do, none think they always understand, and 6% believe they never do.

So what do advisors want in terms on support from DCIOs? In order of importance, they want:


  • Competitive intelligence about what other advisors are doing

  • Business-building tools

  • Thought leadership and market commentary they can share with clients and prospects

  • Sponsorship of events

  • Insight into industry and regulatory changes


So regardless of whether there is a temporary or a long-term slowdown, DCIOs are taking a critical look at expenses, especially external wholesalers. The result: slower hiring and deployment of more internals and specialists. They’re also realigning compensation and trying to deploy their expensive sales professionals more strategically.

Fox notes that rather than inhibiting support of advisors, as some experts are predicting, the new DOL rule is causing DCIOs to focus more support on elite plan advisors who they think will end up winning more assets as a result of the rule.

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