PLANADVISER - May/June 2018 - 30

2018 PLANADVISER DCIO Survey
N
(DCIO)
ow in its seventh year of publication,
the PLANADVISER Defined
Contribution Investment Only
Survey
shows
a
continued
upward trend-albeit at a much slower
pace than in previous years-for DCIO
assets among the survey's 42 participating
providers. While not representative
of this entire market, the survey
can be seen as a proxy for the overall
direction of DCIO asset
levels and
allocation.
The
participating
investment
firms supplied their year-end asset
levels in DC plans for 2016 through the
first quarter of this year. These asset
levels rose $25 billion (0.5%) in the
three months from December 31, 2017,
through March 31, which may sound
impressive but pales in comparison
with a year ago: During that same
three-month period, DCIO assets rose
$163 billion (16.3%). However, the yearover-year
increase from 2016 through
2017 was $685 billion, or 17.1%-
compared with the $705 billion, 21.4%,
increase from 2015 through 2016.
In terms of asset allocation by
investment vehicle, the landscape
continues to be stable. Mutual funds
again dominate, comprising 61% of
DCIO assets; 20% is in separately
managed accounts and 18% in collective
investment trusts (CITs).
Similarly, allocation by investtype,
which moved somewhat
ment
two years ago, did not change much.
This year, an average of 54% of assets
is invested in stocks-the same as in
2016. Stable value and money market
funds remained at 8%, bonds at 18%,
and asset allocation funds at 18%.
Survey participants were also
asked what they see as the biggest
challenges defined contribution investment
only firms face today. At the top
of their list are two things: the consolidation
of investment menus in defined
contribution plans and, a perennial
favorite, fee compression. The top
opportunity, as indicated by the firms
themselves, is the growing registered
investment adviser (RIA) firm presence
in larger plans, replacing traditional
institutional investment consulting
firms. -Quinn Keeler
*All percentages in this set of findings reflect the change from the prior period.
PRODUCTS/SERVICES FOR FINANCIAL ADVISERS
Due diligence meetings
Investment committee meetings
Research
Practice management
Conferences for advisers
Training for DC plan sales/service
Plan benchmarking
Lead generation for 401(k)/qualified plans
Target-date evaluation tools
Access to ERISA counsel
Compliance support
Sponsorship of designations/certifications
Industry Snapshot (from responses of 42 DCIO providers)
TOTAL DCIO ASSETS ($mm)
12/31/2015
12/31/2016
12/31/2017
Q1 2018
$3,289,682
$3,994,600 21.4%*
$4,679,436 17.1%
$4,704,706 0.5%
*All percentages in this set of findings reflect the change from the prior period.
DCIO ASSETS, BY VEHICLE
Mutual funds 61%
Separate accounts 20%
Collectives 18%
Other 2%
DCIO ASSETS, BY TYPE
Stocks 54%
Asset-allocation funds 18%
Bonds 18%
Stable value/
Money market 8%
Other 2%
DCIO SALES
75
Average number of
recordkeeper selling
agreements
6.6%*
15
Average number
of adviser-focused
salespeople
28.7%
10
Average number
of institutional
salespeople
40.1%
$28,738
Average assets
of top DCIO
fund ($mm)
31.0%
95%
81%
81%
74%
71%
67%
62%
43%
40%
31%
24%
24%
0.3%*
-0.1%
-0.1%
-0.3%
+0.6%
-0.5%
-0.2%
-0.3%
+1.2%
-0.2%
-0.8%
-0.8%
30 | planadviser.com may-june 2018
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PLANADVISER - May/June 2018

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