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Make a Move to Grow Defined Contribution Investment Only

by Anu Heda

Defined Contribution Investment Only business is ripe for the taking. Last week, I sat down for lunch with an executive charged with fueling his firm's growth through the Defined Contribution Investment Only (DCIO) business. That's a considerable amount of pressure on one set of shoulders. He is, however, meeting that pressure with an equal amount of excitement and enthusiasm. In our discussion, as well as others being had throughout the industry, two problems plague the DCIO lines of business.

First, the lack of uniform reporting makes it difficult to impossible to compensate DCIO sales teams fairly. Most firms are nervous about highly compensating DCIO sales people with non-uniform or missing sales reporting. High compensation is crucial, however, because high-quality funds sales people are unlikely to move from selling funds to DCIO if the pay is worse.

Second, the marketing organizations are not telling the DCIO story effectively. Therefore, the "leave behind" (whether on paper or a suggested Web site) is unmemorable and undifferentiated. The limited materials that I've reviewed confirm that the handouts and Web sites are bland.

An asset manager who wants explosive DCIO growth can seed the business with the best talent from mature lines of business in order to sell and market effectively. Excitement alone will not grow DCIO business - it will take the best of Sales and Marketing from throughout the organization.