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Asset Managers Need Dedicated DCIO Teams

By Steven Miyao

The defined contribution investment only (DCIO) space continues to grow in importance. Our consulting work has shown us that most Asset Managers have not dedicated enough resources to this market in relation to the opportunity.

In the last month, a number of our clients announced the expansion and realignment of their DCIO business. This is in response to the growing opportunities in the advisor-sold retirement marketplace. These DCIO teams generally focus on working with record keepers and VA providers, as well selling and providing value-added support to individual financial advisors who sell retirement plans. Even though a number of Asset Managers have started to dedicate more resources to this effort, only a fraction of firms have set up an adequate structure to support the number of platforms and advisors these firms are targeting.

The majority of our clients have less than seven people dedicated to this business. These teams usually are comprised of:

• Head of DCIO Sales


• Sales specialist


• Hybrid specialists

A DCIO specialist needs to cultivate around 10 relationships at a given Tier 1 platform, including people in distribution, relationship management, research analysis, and platform management, and this does not include the support of any individual financial advisors. These teams are also trying to increase their footprints at focus firms by cultivating additional relationships.

The bottom line is that one manager can only handle a handful of Tier 1 relationships. Additionally, a manager can handle a few additional Tier 2 distributors, for whom less value-added support is provided. It is easy math to calculate staffing against the number of most company's focus firms. The result is obvious - more resources are needed to effectively support a relationship.