2019 All Stars

Chris Lyon

Title: Principal
Firm: Rocaton Investment Advisor
Assets under advisement: More than $641 billion
Number of consultants at firm: 60 employees, including 14 consultants
Client type: Defined contribution and defined benefit plans, financial intermediaries, insurance general accounts, endowments and foundations, and health care companies

Chris Lyon has headed up Rocaton’s defined contribution offering since co-founding the company in 2002. Rocaton became part of Goldman Sachs earlier this year. Lyon is responsible for designing the investment programs for large defined contribution plans and helping them adapt to the ever-changing retirement landscape.

While structuring and monitoring investment options is at the heart of what Rocaton does, Lyon and his colleagues are keenly aware they are ultimately designing an investment program for the benefit of individual investors. Design decisions, ranging from the number of options to how those options will be administered and communicated, all factor into the equation.

“Studies have shown that too much choice can be overwhelming for many investors. We’ve also seen strong results from various forms of automation and default strategies, helping to increase the chance that less engaged participants are still on track,” Lyon says. While keeping choices relatively simple for participants, Lyon explains there is room inside the investment options to increase the array of investment strategies and asset classes employed, for example, within custom target date funds and specific strategies for people nearing or in retirement.

Combatting Complexity

Lyon argues that it’s a challenging time to not only be a defined contribution participant, but also a defined contribution plan sponsor. “Participants are more reliant on DC plans for retirement income and are looking to the plans, the plan sponsors, and their providers for more help. Similarly, these are highly visible and valued benefits, so sponsors are very focused on their competitiveness, while also factoring in changes in the regulatory, legislative, and litigation environment.” It’s combining these challenges with the complexities of the capital markets that makes the work so interesting for Lyon and the Rocaton team.

In addition to advisory relationships with clients, Rocaton also provides outsourced-chief investment officer (OCIO) services to DC plans. While across the industry, OCIO has grown in popularity, Lyon has a particularly favorable outlook for the growth potential of DC OCIO, noting: “Investment menu design, manager decisions, and/or administrative tasks can be handled by the OCIO provider, in close collaboration with the client. This type of relationship allows the staff and committee to spend its limited time and resources on the strategic and design matters that can have the most direct impact on potential participant outcomes.”

When we asked why Rocaton accounts for many of these seemingly qualitative considerations in its advice to clients, Lyon offers, “if you don’t take into account the overall defined contribution ecosystem, you may be leaving something on the table. You can have the best investment program, but if people aren’t engaging well, then it’s not as great as you might think,” Lyon says. 

By Steffan Navedo-Perez

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