DCIO State of the Industry and 2026 Outlook
The Defined Contribution Investment Only (DCIO) market sits at a rare intersection of growth and compression. Assets continue to climb, $11.3 trillion across 730,000 plans and 85 million participants*, yet margins are tightening as automation, litigation, and scale reshape how value is measured and rewarded.
For DCIO providers, the next 24 months will define competitive positioning. Growth is still available, but it won’t come from product proliferation alone. It will come from distribution clarity, and from the strategic alliances that connect investment manufacturers, recordkeepers, and Retirement Plan Consultants (RPCs).
At The Asteri Collective, we see this as the next great alignment moment in the defined contribution ecosystem. RPCs are not just administrators; they are the integration layer that determines whether plans run clean, compliant, and scalable, and whether DCIO distribution succeeds long term.
Market Landscape: Growth Amid Compression
The DCIO segment has grown steadily alongside expanding DC plan adoption. State mandates, small-business incentives, and federal support under the SECURE Acts continue to feed plan creation. Despite Boomer drawdowns, the total DC asset base remains strong, supported by new entrants and steady contributions from Gen X and Millennials.
The economics beneath the growth have changed.
- Fee compression continues to erode basis points across both core and supplemental DC assets.
- Auto-enrollment and default QDIA structures reduce participant-level decision-making, concentrating flows into fewer options.
- Plan sponsors and fiduciaries increasingly evaluate providers on operational transparency and partnership collaboration, not just fund performance.
The Asteri Collective RPC member firms elevate DCIO value by ensuring that plans are built to accept and sustain institutional-quality products. Clean data, compliant plan design, and standardized processes help DCIOs place investments more efficiently, and retain them through the plan’s lifecycle.
Fee Compression and Revenue Challenges
DCIO profitability is under direct pressure. Litigation, passive dominance, and the success of low-fee models have limited pricing flexibility. While total assets rise, net revenue per asset dollar continues to decline.
To sustain profitability, DCIOs are pursuing:
- Broader shelf integration across recordkeeping platforms.
- Value-add programming for advisors and plan sponsors.
- Technology alignment with data-sharing standards that streamline reporting and compliance.
Yet, as McKinsey’s data shows in the recordkeeping segment, scale alone doesn’t offset margin loss. What’s needed is a more efficient distribution ecosystem, and that’s where RPCs shift from “vendor” to “value amplifier.” By standardizing plan documentation, aligning plan features with investment structures, and maintaining data integrity across platforms, Asteri member firms give DCIOs cleaner, faster access to plan data and more predictable placement outcomes.
Technology and AI Adoption
Technology is rewriting the rules for how DCIOs engage intermediaries and measure success. APIs, automation, and predictive analytics are reshaping how investment flows are tracked and serviced. Artificial intelligence is entering investment operations, sales enablement, and participant engagement, improving scalability without headcount expansion.
Still, the gap between recordkeeper systems and DCIO reporting remains a drag on efficiency. Data discrepancies, delayed reconciliations, and siloed integration all reduce the ROI on technology investment.
Member firms within The Asteri Collective integrate directly with recordkeeper systems, providing data accuracy and consistent reporting that power DCIO analytics. When RPCs deliver structured, validated data, DCIOs can make faster, smarter distribution decisions, turning technology investment into tangible revenue impact.
Explosion of Plan Formation
New plan creation is driving one of the largest distribution opportunities the DCIO market has seen in decades. State programs, pooled employer plans (PEPs), and small-business tax credits are expanding access at unprecedented rates.
Small plans often introduce operational friction. Lower balances and thinner margins demand higher efficiency and disciplined servicing models. For DCIOs, it’s a high-volume, low-margin environment that rewards clarity and simplicity. The Asteri Collective RPC member firms act as the DCIO’s entry point to new plans. They manage onboarding, coordinate data with payroll providers, and ensure compliance alignment, reducing friction at the plan’s inception. This makes it possible for DCIOs to scale into smaller markets without increasing servicing costs.
Convergence of Wealth, Retirement, and Workplace Benefits
The convergence of wealth and retirement has reshaped the DCIO playbook. As recordkeepers expand into managed accounts and personal advice platforms, the traditional DCIO position within the lineup is changing.
To remain relevant, DCIOs are leaning into:
- Personalized investment solutions (e.g., custom TDFs, CITs).
- Data partnerships that connect participant behavior to product design.
- Collaborative relationships with advisors and RPCs who translate plan-level strategy into participant outcomes.
Asteri’s collective of RPCs acts as the connective tissue between plan sponsors and investment providers. By coordinating plan design and participant communication, Asteri firms create the conditions where DCIO strategies can demonstrate measurable impact, improving retention and performance outcomes for both plan sponsors and participants.
Data Sharing and Standardization
The next competitive frontier for DCIOs isn’t just performance, it’s data.
The industry is moving toward a future of real-time, standardized, bi-directional data exchange among recordkeepers, DCIOs, and intermediaries. Those who master this flow will win faster shelf approvals, cleaner audits, and better participant analytics.
The Asteri Collective member companies are fluent in SPARK API protocols and secure file transfer standards, ensuring compliant, standardized data flows. This accuracy strengthens DCIO relationships with recordkeepers, reducing operational friction and increasing trust in shared reporting.
Consolidation and Strategic Partnerships
M&A across recordkeeping and asset management continues to reshape the DCIO distribution landscape. Consolidated platforms mean fewer gates, but higher thresholds for partnership quality. Scale matters, but fit matters more.
DCIOs that align with Retirement Plan Consultants (TPAs) gain durable distribution advantages. A trusted RPC relationship ensures investment solutions are properly implemented, tested, and maintained within plans. As a collective of separately owned RPCs, Asteri delivers consistency, credibility, and technical precision that national recordkeepers and DCIOs rely on. This partnership model enables better scalability, operational stability, and confidence in investment outcomes.
2026 Outlook: From Volume to Value
Looking ahead to 2026, the DCIO market will remain robust, but different. Growth will come less from new product adoption and more from integration, data precision, and cross-functional alignment across the retirement ecosystem.
The winners will be those who:
- Translate complex plan data into actionable insights.
- Build distribution models that integrate seamlessly with RPC and recordkeeper processes.
- Demonstrate clear, measurable value to advisors and sponsors beyond performance charts.
Through our network of forward-thinking Retirement Plan Consultants, The Asteri Collective connects investment innovation to operational execution. We help DCIOs tap into new plan opportunities, streamline data exchange, and deliver outcomes that resonate with sponsors and participants alike, sustaining growth even in an era of compression.
