UK - Asset managers are staying in the "comfort zone of defined benefit" and are failing to seek business opportunities in defined contribution schemes, consulting firm Spence Johnson said.
The research and consulting firm said some institutional asset managers were "short sighted" and just not interested in DC because they believed it to be low margin.
However, director Magnus Spence said DC investment only, DCIO, would grow to become the "institutional asset management opportunity of the future" - predicting it would soon make up half the DC market in the UK and 20% of asset management sales.
The firm also said target date funds would become a vital component of DCIO plans in the UK because target date was a mixture of funds - and therefore a great opportunity for thirdparty suppliers.
Spence said: "DC will grow from virtually nothing to something very significant in due course."
However, Schroders head of DC Stephen Bowles said there had been a split between bundled and investment-only provision for quite some time.
He said: "Pretty much all trust-based DC schemes have implemented using DC investment-only providers and third-party administrators. However, what we are seeing now is asset managers who had their fingers burnt entering DC 10 years ago looking to enter the market again."
HSBC Global Asset Management head of DC services Peter Cox said the big issue was the quality of the platform the funds sit on because schemes have to access funds in this way.
"If it is a poor platform - not offering STP (straight-through processing) or with delays in fund switches - the advantages a good fund is offering are almost eradicated. Within DC time is money.
"The more innovation the more investment only will grow but no matter how good the fund it must be backed up by a quality platform if you are to get all the advantages," he said.
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