DCIO HIRING TRENDS – 2017 Pace of Hiring/Promotions and Roles to Watch in 2018

Fewer Firms are Hiring or Promoting External DCIO Salespeople

Seitz Partners research shows that while the overall size of the DCIO external sales population increased each year for the past five years, hiring has slowed significantly from five years ago. Before we sound the alarm, know that the slower pace of hiring doesn’t necessarily represent a problem for the industry. Despite several firms exiting the DCIO business or laying off their dedicated DCIO salespeople in favor of pushing responsibility for DCIO sales to their intermediary wholesaling team, the year over year decrease in hiring (see Table) is primarily caused by market saturation. That is, most asset management firms that want to be in the DCIO market are already there, and many leaders believe they are fully/optimally staffed.

Of the firms that hired/promoted DCIO external salespeople in 2017, their motivation fell into three main buckets:

replacement of a salesperson that joined a competitor
replacement of a salesperson that took another role within their existing firm including relationship management, key accounts or DC-focused consultant relations positions
new entrant or re-entrant to the DCIO channel and the need to build a team

Investment in Human Capital – Roles to Watch

While the pace of external sales hiring is slowing, asset managers are hiring for several important positions:

Relationship Management – responsible for marketing the firm’s investment strategies to recordkeeping partners, sub-advisory partners, mid-tier consultants and RIA aggregators
Defined Contribution Key Accounts – similar to Relationship Managers but may focus solely on managing relationships with larger wirehouse and independent broker-dealers
Defined Contribution Consultant Relations – responsible for positioning the firm’s DC strategies with mid-tier consultants and RIA aggregators; may also call directly on defined contribution practices at large, national investment consultants or partner with institutional consultant relations team
Defined Contribution Channel Marketing – responsible for owning the firm’s brand, content and marketing strategy within the DC channel and partnering with DCIO sales team to create customized engagement within the channel
Institutional Defined Contribution Sales/Business Development – responsible for either selling directly to plan sponsors or partnering with a firm’s existing institutional sales team to promote its DC investment offerings

Key Takeaway

Asset managers looking to grow their DCIO businesses are placing significant emphasis on mid-sized investment consulting firms and RIA aggregators (i.e., SageView, Lockton, CAPTRUST and others). They are dedicating sales, relationship management and marketing professionals, as well as additional capital and resources, towards this increasingly important group of influencers and clients.

Looming Question

What is the optimal organizational structure (and scope of job responsibilities within that structure) for firms with limited resources to effectively cover platforms, recordkeepers, aggregators, advisors and consultants?

What do you think? If you are interested in commenting or learning more, we would love to hear from you at cseitz@seitzpartners.com.