Seventy-nine percent of DCIO providers plan to increase staffing further in at least one distribution-related role. The leading positions where DCIO groups plan to increase head count are internals, where 50% of firms plan to increase staffing; and marketing, where 46% plan to increase staffing.
Many fund firms have already implemented significant expansions of external sales roles, so the pace of hiring these positions is slowing, according to the report, “DCIO Sales Staffing Trends.”
“The market for 401(k) plans and other DC plans has hit a maturity phase that will feature slightly slower growth, and that means intensified competition over market share,” says Tom Modestino, Ignites Retirement research director and author of the report. “With most DCIO sales leaders under pressure to rein in costs, more of the hiring focus is moving to less-expensive positions such as internals and marketers.”
Only 36% of DCIO organizations plan to increase head count of external salespeople, and only 29% suggest they will be hiring in key account/strategic relationship roles.
“Executives we’ve spoken with tell us that the ratio of externals to internals must shrink to more effectively deliver territory coverage and better meet the needs of financial advisers who specialize in serving DC plans,” says Modestino. “And beyond exceptional salespeople, DCIO firms believe that the best way to differentiate themselves in a crowded market is through unique ‘value add’ marketing programs. This means marketing roles must grow to support existing programs and install new ones.”
The report, “DCIO Sales Staffing Trends,” was based on an Ignites Retirement Research survey of top DCIO providers in October and early November. Surveyed firms represent nearly $550 billion in DC assets.