Broadridge rolls out new ETF tool

Broadridge Financial Solutions Inc. has launched a tool to allow exchange-traded-fund providers to see what types of financial advisers are buying their funds. Last year, Broadridge bought Access Data Corp., which offers a tool that allows mutual fund companies to see how intermediaries are using their portfolios. This new offering is an evolution of that product, said Frank Polefrone, senior vice president at Access Data, a Broadridge company. The tool will allow ETF providers not only to see what kinds of advisers are selling their ETFs — such as retirement plans or registered investment advisers — but will also allow them to see in which geographic regions their ETFs are selling well, he said. “Overall, the tool helps ETF providers understand who is buying their products and for what purpose,” Mr. Polefrone said. Although mutual fund companies are able to get an idea of who their clients are, it is harder for ETF providers because people don’t buy ETFs directly through the provider but rather through the secondary market, said Paul Justice, an analyst at Morningstar Inc. As a result, ETF providers often don’t have the ability to access the advisers with whom they are working when they need to. This became very apparent last year when Guggenheim Partners LLC acquired Claymore Securities Inc. At the time, Claymore sent out a proxy to shareholders of many of its funds, including its popular Claymore Shipping ETF Ticker:(SEA). Unfortunately, the firm couldn’t get 50% of the votes needed to conduct a change of ownership, so it had to shut the fund down and reopen it. “It was one of the firm’s most successful funds,” Mr. Justice said. Broadridge’s tool won’t provide contact information of advisers selling the ETFs but does allow providers to know which platforms are the most popular distribution channels for their offerings, Mr. Polefrone said. With this tool, ETF providers will be able to focus their marketing and educational materials on the needs of advisers, Mr. Justice said. “Whether that’s a welcome outreach by advisers remains to be seen,” he said.