As with other DC service providers, DCIOs are experiencing significant change as the retirement market in general, and the DC market specifically, becomes part of the mainstream. Whether prescient or lucky, asset managers that are well entrenched in DC plans will have a huge advantage as more money flows into retirement accounts and more advisors focus on this sector.
So what does it take to be successful DCIO? Certainly having good-performing, well-priced funds with a long track record helps, but those characteristics are merely table stakes. With most active, equity-based mutual funds in net redemptions, those without a viable TDF strategy or without the benefit of owning a record keeper are looking for a silver bullet strategy.
So what might the future hold? The rich will get richer and smaller providers will make strategic bets without making big investments. If the DOL’s fiduciary rule passes, will it be harder for record keepers to use proprietary funds? Will private equity and hedge fund managers really enter the retirement market? Will advisory groups’ CIT efforts, like those developed by CAPTRUST and Sheridan Road, become prevalent? Will custom TDFs, managed accounts, model allocations and 3(38) services take hold? Will hybrid or outsourced wholesaling finally become viable?
In our latest update to NAPA Net’s list of DCIOs, we profile recent changes in the DCIO market, including new initiatives and changes at established firms like Lord Abbett, TIAA-CREF, PIMCO, JP Morgan, Putnam and RCAP.
