DCIO sponsors take heed.
Plan sponsors are looking to modify their investment line-up over the next 12 months, according to new findings by research shop Cambridge, Mass.-based Cogent Research.
Specifically, just over half (51%) of plan sponsors say they will adjust their investment line-up over the next 12 months, which is up considerably from the 44% of sponsors that anticipated changes one year ago. More than a third of DC plan sponsors cite reevaluating the investment menu among their top three priorities, and one in ten say it is their first priority for the upcoming year.
"All this attention to plan investments is a double edged sword that presents both potential risk and opportunity for asset managers," stated Linda York, vice president, Syndicated Division and lead author of the report. "In order to capitalize on this expected activity, firms need to ensure they match the right products and investment objectives to each segment's needs and deliver on the key aspects that drive consideration."
But how can smaller shops compete against their bigger rivals such as Fidelity Investments and Vanguard in the retirement space? "The DCIO (defined contribution investment only) market is dominated by a select few market leaders who have established a formidable presence in terms of brand awareness, favorable impression, and likely consideration," York noted.
"That said, up-and-coming firms looking to grow and differentiate their brands in the DCIO market have the opportunity to enhance their core brand positioning with a focus on service and support, risk management practices, thought leadership, and/or competitive fees or fee structure."