2017 PLANADVISER DCIO Survey
Now in its sixth year of publication, the PLANADVISER Defined Contribution Investment Only (DCIO) Survey continues its trend of finding a steady increase in DC plan assets among the survey’s 41 participating providers. While not representative of the entire DCIO market, the survey can be seen as a proxy for the overall direction of asset levels and allocation.
The participating investment firms provided their year-end asset levels in defined contribution plans for 2014 through 2016, as well as for the first quarter of this year. These asset levels rose an impressive $163 billion (4.6%) in just the three months from December 31, 2016, to March 31, 2017.
In terms of asset allocation by investment vehicle, however, not much has changed in a year in the DCIO market. Mutual funds continue to dominate, with 64% of assets, 20% in separately managed accounts and 16% in collective investment trusts (CITs). Allocation by investment type did show some movement, though. This year, survey participants reported an average of 54% of assets invested in stocks—an increase of more than 8% over last year.Stable value and money market funds both saw drops in allocations, to 7% and 1%, respectively, whereas bonds increased somewhat to 18%.
Besides the figures reported for the DCIO market overall and
by individual participating firms, the survey collected some qualitative
information from respondents on what their biggest challenges are, as well as
what they believe to be their best opportunities going forward. Nearly
three-quarters of DCIO firms cite getting reporting from recordkeepers about
investments through registered investment advisers (RIAs) as one of their top
three challenges, and several also indicated that fee compression and the trend
from active to passive investing are significant challenges. As for
opportunities in the DCIO market, the growing presence of RIA firms in the
larger plan market—displacing the traditional investment consulting firms—is
the No. 1 category selected by DCIO providers.
Methodology:
PLANADVISER’s sixth annual survey of defined contribution investment only
(DCIO) providers was conducted in April and May via an online questionnaire.
Approximately 114 investment firms known or thought to market to defined
contribution (DC) plans received the questionnaire, and the 42 organizations
listed in the pages that follow were those that agreed to complete the survey
in its entirety. This information is for reference only and is not
comprehensive of the entire DCIO industry, as some major providers chose not to
participate. For more information on data available for purchase, or to take
part in future surveys, please email surveys@strategic-i.com