DCIO Market Matures and Adjusts

In a sign that the DCIO market is maturing, recent research from Ignites (subscription or free registration required) shows that hiring today and in the future will be focused on internal wholesalers, marketing and product specialists — ending the run of blindly increasing external wholesaler staff. In addition, key accounts people who had spent most of their time building relations with record keepers and distributors are being asked to get more involved in the sales process.

Costs are a big driver of the changes highlighted in Ignites’ trio of reports, which cover staffing, sales people duties and compensation. While externals and key accounts people make an average of $350,000, internals are a full two-thirds less. Hybrid wholesaling combining phone and field people has been a bust so far, but technology and costs may drive some firms to try again. 

Industry consolidation is changing the roles of key accounts people, with fewer record keeping platforms with less power over which investments get chosen and more aggregators like CAPTRUST, Sageview and NFP Retirement. With a more institutional and consolidated market, key accounts people are getting more involved with sales rather than opening new platforms or negotiating revenue sharing or marketing deals. Externals are being asked to spend more time upselling current clients, with a greater percentage of pay based on commissions.

DCIOs have become a lifeline for advisors, who have come to depend on them for practice management, education and prospecting services. The maturation of the DCIO market means that the days of an open checkbook are over — advisors need to ask for what they really want, not just take what is being offered, as well as budget with their DCIO wholesalers for the services and tools they really need.