PLANADVISER - May/June 2019 - 30

2019 PLANADVISER DCIO Survey
N
(DCIO)
upward
ow in its eighth year of publication,
the PLANADVISER Defined
Contribution Investment Only
Survey
shows
trend
a
continued
for DCIO assets-
albeit at a much slower pace than in
previous years-among the survey's
37 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
provided their year-end asset levels in
defined contribution plans for 2017
through the first quarter of this year.
The year-over-year DCIO assets from
2017 through 2018 dropped $162 billion,
or 3.5%-compared with the $684
billion, 17% increase from 2016 through
2017-but the drop in total assets was
largely driven by poor market returns in
late 2018. Conversely, Q1 2019 has been
much more favorable and asset growth
has dwarfed that of the prior year,
rising $447 billion from December 31,
to this March 31, vs. only $25.3 billion
during the comparable period last year.
As to asset allocation by investment
vehicle, the landscape remains
stable. Mutual funds again dominate,
comprising 60.3% of DCIO assets; 19.8%
is in separately managed accounts and
19.6% in collective investment trusts
(CITs). By contrast, allocation by investment
type saw some movement. In this
year's survey, respondents reported
an average of 47.5% of assets invested
in stocks, vs. 54% in last year's survey.
Stable value and money market funds
moved from 8% to more than 11%,
while bond allocations and asset-allocation
funds stayed flat.
Many DCIO firms work closely
with financial advisers who cater to the
defined contribution market. In order
to differentiate themselves, more than
eight in 10 DCIO companies will hold
due diligence meetings (85%), and 77%
offer investment committee meetings,
conferences for advisers and research to
advisers. Yet, only 31% of firms provide
access to ERISA [Employee Retirement
Income Security Act] counsel, and just
23% will sponsor designations/certifications.
-Quinn Keeler
12/31/2016
12/31/2017
12/31/2018
Q1 2019
$3,994,600
$4,471,252 -3.5%
$4,633,914 16.0%
$4,918,270 6.1%
*All percentages in this set of findings reflect the change from the prior period.
DCIO ASSETS, BY VEHICLE
Mutual funds 60.3%
Separate accounts 19.8%
Collectives 19.6%
Other 0.3%
DCIO ASSETS, BY TYPE
Stocks 47.5%
Asset-allocation funds 17.9%
Bonds 16.9%
Stable value/Money
market 11.3%
Other 6.4%
Industry Snapshot (from responses of 37 DCIO providers)
TOTAL DCIO ASSETS* ($mm)
DCIO SALES*
77
Average number
of recordkeeper
selling agreements
2.4%
17
Average number
of adviser-focused
salespeople
10.9%
11
Average number
of institutional
salespeople
9.4%
*All percentages in this set of findings reflect the change from the prior period.
PRODUCTS/SERVICES FOR FINANCIAL ADVISERS
Due diligence meetings
Conferences for advisers
Investment committee meetings
Research
Plan benchmarking
Target-date evaluation tools
Practice management
Compliance support
Lead generation for 401(k)/qualified plans
Training for DC plan sales/service
Access to ERISA counsel
Sponsorship of designations/certifications
$35,461mm
Average
assets of top
DCIO fund
23.4%
85%
77%
77%
77%
65%
57%
46%
38%
38%
38%
31%
23%
-10.5%
8.5%
-4.9%
-4.9%
4.6%
41.9%
-37.8%
57.7%
-11.6%
-43.3%
0.0%
-4.2%
30 | planadviser.com May-June 2019
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PLANADVISER - May/June 2019

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