When choosing a new fund, which DCIOs do plan sponsors consider?
According to a recent Cogent survey of 620 plan sponsors, Vanguard has replaced Fidelity as the most likely choice. Newcomers to the top 10 this year include John Hancock Funds, JP Morgan, Goldman Sachs and Prudential, with BlackRock jumping from eighth place in 2014 to third.
2015 Rank | 2014 Rank | DCIO |
1 | 2 | Vanguard |
2 | 1 | Fidelity |
3 | 8 | BlackRock |
4 | 11 | JP Morgan |
5 | 3 | American Funds |
6 | 13 | Goldman Sachs |
7 | 18 | Prudential |
8 | 31 | John Hancock Funds |
9 | 4 | T Rowe Price |
10 | 9 | Schwab |
Most DCIO marketing is focused on larger plan sponsors, advisors and consultants, as well as IRA rollover ads to consumers. But the vast majority of plan sponsor gatekeepers are HR or benefit professionals, a mostly overlooked market.
It’s easier for advisors to recommend funds that plans sponsors know, especially if they are looking to get hired. Suggesting that success breeds success, six of Cogent’s top 10 DCIOs are among the top 10 TDFs by assets, according to Morningstar, and two others are in the top 20.
It only gets tougher from here for DCIOs — especially for active, long-only mutual funds without a viable TDF strategy.
