Delta Data has hosted a CIT forum for several years and charted the growth of the industry as it has accelerated in relation to mutual funds, most recently at our annual event, Activate 2020. We selected the name because we felt it was time to formally identify and have a concerted industry dialogue concerning the myriad of variables creating opportunities for Collective Investment Trusts. This year’s event yielded a sweeping survey on the continued opportunities and challenges of the CIT industry, involving 24 different bank and trust companies, asset management companies, and financial advisors representing several of the top ten financial entities in the United States. The survey became the basis of a study, whose authors include Delta Data, AON, Morningstar, NASDAQ, and Streamline partners, and the focus of an on-demand webinar.
The study found that continued CIT growth is dependent on multiple factors, including pending legislation from Washington for 403(b) usage, deploying technology to expedite client onboarding and improve counterparty communications, and an increase in transparency to mitigate historical pain points with servicing and compliance. The study found an industry drive towards the small plan, which is a change from the legacy business model on which the original CIT product was built.
Analysis from the panels on both the webinar and the study agreed that the industry suffers from a lack of visibility on basic data like prices, which slows adoption and hinders efficient operational execution, resulting in a need for standardization and managing visibility.
Panelists and study authors also found that the drive to target smaller plans, enabled by the utilization of counterparty communication technology, was identified as a driver for future growth. “100% of CIT bank sponsors and 75% of asset managers indicated they were planning on targeting this market segment. The race is on to own the down-market opportunity,” says Whitfield Athey, CEO of Delta Data Software, sponsors of the study.
The study is available here from Delta Data. Additionally, the study itself was the focus of a webinar, with participants from AON Trust Company, Morningstar, NASDAQ, and FIS discussing the findings. The webinar can be watched on-demand here.