MassMutual Retirement Services is sprinting into the world of defined contribution investment-only services, pushing for greater recognition of its investment capabilities.
The DCIO effort, announced Wednesday, was officially launched during the first quarter.
The firm made a series of strategic hires in recent months to help build its DCIO team. At the helm is Aruna Hobbs, senior managing director and head of institutional investments at
MassMutual. She joined the company last fall, hailing from New York Life's investment arm. There, Ms. Hobbs was head of stable value.
“The goal behind launching the team was to expand the market, not just in the space that's on our platform, but outside the platform,” Ms. Hobbs said.
Other team members include DCIO veteran Johanna Vogel, managing director, national consultant relations at
MassMutual. She joined
MassMutual from Dividend Capital, a manager of real estate investment trusts. Rob Olszewski, who was hired in December from Mongoose Capital Partners, is a regional investment director, as is Hartford Financial Services Group alumnus John Hipsher. Paul Webb, a veteran of
MassMutual, is the national practice leader of adviser channels in the newly-formed DCIO group.
News of
MassMutual's expansion in the DCIO business follows on the heels of the insurer's overall win among smaller money managers at the Lipper Awards.
Gaining that foothold in the DCIO market, however, is going to be tough, particularly against manager juggernauts such as the Vanguard Group and
Fidelity Investments. “Once you venture there, it's highly competitive,” said Jeff Holt, an analyst at Morningstar Inc. He has covered the firm's Retire Smart target-date fund series.
A firm that hosts its own funds on its own recordkeeping platform won't have much difficulty getting its products in retirement plans' investment menus. It's a different story when those funds are being hosted on other third-party platforms among an array of products from other fund managers.
"In DCIO, you go against everyone: best in class across the board,” Mr. Holt said. “It's a hard area to get a lot of traction very quickly.”
He added that while the subadvised fund structure may resonate with certain plan sponsors, it's still a very competitive landscape to break into.
Wholesalers and regional directors are going to play the biggest part in getting the word out about the DCIO capabilities with advisers and third-party administrators.
“There's a big on-the-ground push,” acknowledged Ms. Hobbs.
Ms. Hobbs believes the firm's subadvised fund will help
MassMutual gain recognition in the DCIO market, where it's up against some fierce competition by large money managers and insurance-based providers that have a large investment lineup for retirement plan clients.
“Over time, my goal is for us to develop a niche to make us stand out from the big names, as well as those insurance-company backed funds,” Ms. Hobbs said.
