Jul 09, 2012 ---
Assets are slated to expand from $2.3 trillion at the end of 2011 to $3.5 trillion, Strategic Insight projects.
Driven by the increasing interest in open architecture and
transparent fees, defined contribution investment only (DCIO) assets are set to
expand by more than 52% from $2.3 trillion at the end of 2011 to $3.5 trillion
by 2017, according to Strategic Insight, an Asset International company.
The growth of DCIO over the next five years will mean a
shift of market share from “proprietary,” or recordkeeper/administrator-run DC
assets, to “open architecture” models, according to the Strategic Insight
report, “DC Market Sizing and Outlook 2012.”
“Fee disclosure regulations will be a primary driver of
investment-only growth, as the new transparency will undoubtedly shed light
upon what have often been considered ambiguous fee arrangements,” said Bridget
Bearden, a research analyst at Strategic Insight and author of the report. “The
availability of external managers on proprietary recordkeeping platforms has
already gained in prominence in recent months.”
More than half of DCIO mutual fund managers that Strategic
Insight surveyed said that their median number of DCIO-focused salespeople had
doubled, from three in 2010, to six by March 2012. Asked what the two best
opportunities are in the DCIO market, the managers said custom target-date
funds and the growing registered investment adviser (RIA) presence in larger
plans, as opposed to the traditional, large employee benefits providers such as
Callan and Mercer.
The report also includes an outlook on challenges and
opportunities for the DCIO market. More information is at www.sionline.com.