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The Markets September 2, 2025
The Evolution of the DCIO Sales Model
Investment firms are increasing emphasis on developing relationships with CIOs and others responsible for approved fund lists and 3(38) programs.
Reported by Mallika Mitra
As more than a third of financial advisers expect to retire over the next decade, according to Cerulli Associates, the retirement industry continues to see mergers and acquisitions. And, as specialist retirement plan advisers join a broker/dealer or sell to a larger financial management firm, investment analytics and decisionmaking are shifting away from individual advisers and toward the larger firms’ chief investment officers.
As a result, defined contribution investment only firms are shifting their sales priorities. When Chris Brown, founder of, and a principal in, Sway Research, began surveying DCIO firms 20 years ago, those firms were focused on getting sales staff out into the field to meet with advisers at companies such as Merrill Lynch or with registered investment advisers, he says.
“It was very much about building up this list of who these advisers were, serving them through [the sales staff in the] field and also backing those field people up with internal [staff]. It wasn’t really so much about the home office,” Brown says. “Things have definitely changed.”
A ‘Bifurcation’
Brown says he has seen a bifurcation between the sales strategies of large DCIO firms, such as BlackRock, Fidelity Investments, J.P. Morgan, PIMCO, State Street and T. Rowe Price, that have a big retirement business and target-date practice, and smaller firms such as Neuberger Berman and Pioneer. The large firms are adding to their field sales force and increasing their relationships with advisers, while smaller DCIOs are pulling back and aiming at getting into models at home offices of firms such as CAPTRUST, Merrill Lynch and Morgan Stanley.
Where there may have been three people at an investment firm focused on home offices and five in the field five years ago, that breakdown may now be four people targeting each segment, or possibly five people focused on home offices and three on advisers the field, based on the firm rethinking its approach, Brown says.
To be clear, DCIO firms aren’t letting the relationships they developed by engaging one on one with adviser practices go, says Chris Bailey, a director in Cerulli’s retirement practice. But they’re placing more emphasis on developing relationships with CIOs, since those are the ones putting together approved fund lists and ideal fund lineups, as well as running 3(38) programs, he says. Firms want to get their investment specialists and portfolio management team in front of potential clients’ home office to discuss qualitative aspects of their offerings, such as how strategies work in various market conditions, Bailey says.
“At the end of the day, there are a lot of great products out there, and [those CIOs] are going to put together a list of five preferred managers or five preferred options for this asset class or this strategy,” Bailey says. “You want to make sure you’re on that list, and the difference between [being] No. 5 [and] No.6—being on that list—could be those qualitative aspects.”
Centralization Allows for Creativity
Bill Ryan, a partner in, and DC team leader at, NEPC, says DCIO sales teams seem to have a greater appetite to be creative for the end client because of the centralization.
“There becomes more of a focal point for them to figure out what the scale and leverage [are] versus wider distribution, where you’re more tethered to the off-the-shelf products,” Ryan says. “[The centralization] allows the RIAs and institutional consultants to be more creative with their clients and [devise] maybe more bespoke solutions that they can scale for their client base.”
DCIOs that are successful have a centralized enterprise relationship manager who works with clients’ home office, he adds.
According to Bailey, Cerulli is hearing that aggregators want asset managers to engage with them before bringing a new product—e.g., a retirement income option—to market, or to private markets in a target-date fund; that way, the aggregator’s feedback can be incorporated.
Where DCIO Goes From Here
Most DCIO firms—even some of the large ones—have been in net outflows for more than a decade, Brown says. They’ve been continuing to build their assets and gain revenues because of the bull market, and a small handful of firms—Fidelity, State Street, T. Rowe Price and The Vanguard Group among them—are eating up the majority of those assets, he says.
“If the market were to turn around the other way, and we were to have a sustained bear market or even just a short bear market that really wiped a lot of assets out, I think you’d see a lot more asset managers reconsidering the space and wondering ‘how do we go forward?’” Brown says. That model could potentially be more focused on home offices and getting into 3(38) programs and other models, he adds.
Ryan says there could be hyper-consolidation among the DCIO firms, with some deciding to retreat from the DCIO space and concentrate on the wealth channel and annual rollovers. But the state of the industry now poses an opportunity for the DCIO sales teams.
“There is an urgency now that I haven’t seen before with the centralized decisionmakers that you can actually effect change,” Ryan says. “I think there’s going to be a tipping point—I don’t know if it’s two or three or five years from now—but the door could close. This is a really exciting window for entrepreneurs in the DCIO sales force to deliver interesting products to DC plans.”
