THOUGHT LEADERSHIP

Investment Differentiation

The value of DCIO to today’s retirement plan adviser
L to R: Burgess and Wallen

One major role of the retirement plan adviser is to help the plan investment committee select and monitor plan investments. Advisers look for investment products that will align with the broader menu that is being constructed, often leading to work with defined contribution investment only (DCIO) providers. Alison Cooke Mintzer, Editor-in-Chief of PLANADVISER, spoke with Jordan Burgess, Senior Vice President and Head of Institutional Sales at Fidelity Financial Advisor Solutions, and Derek Wallen, Senior Vice President, DCIO Division Manager at Fidelity Financial Advisor Solutions, about how DCIO firms can be able partners to today’s retirement plan advisers.

PA: What is the role of defined contribution investment only in today’s retirement plan industry?

Wallen: DCIO firms provide investments, and investments are the engine of a retirement plan. We just completed a survey of 937 plan sponsors asking them how they evaluate the plan advisers they work with—the No. 1 way is by looking at the investment menu and investment performance on an ongoing basis. In addition, as a DCIO firm, we work with plan advisers to help them achieve better outcomes in the areas of plan design and participant engagement by leveraging our experience, investments and resources.

PA: What is the value of separating the investment provider from a plan recordkeeper?

Burgess: Fidelity believes advisers play a strong role in helping plan sponsors; in fact, our latest research indicates that 84% of plan sponsors use an adviser for their plan needs—that is up 9 points from 2012.

With our DCIO business, our strategy and business model is focused on supporting advisers, recordkeepers and plan sponsors with their goal of helping participants achieve better retirement outcomes. To us, this means having a strong institutional investment lineup with flexible pricing, investment and retirement thought leadership to provide meaningful insights, deep knowledge about recordkeepers across the industry and dedicated resources to support defined contribution (DC) professionals.

Fidelity also has a fully integrated, bundled platform and dedicated resources focused on delivering a world-class experience to advisers, plan sponsors and participants. At the end of the day, it is about a client-focused approach that addresses the diverse needs of our clients.