A new report is a further call to action for fund managers who are lagging on providing exchange-traded funds as advisor and client demand grows.
With ETFs typically offering lower expense ratios than mutual funds, the majority of registered advisors are selling them (91%) according to a new report, closing in on the share who are selling mutual funds (94%) — and that’s set to escalate.
The Escalent Advisor Brandscape report conducted by Cogent Syndicated looks at how advisor marketplace revenue is impacted by brand and loyalty.
It reveals that 48% of ETF users plan to increase their use in client portfolios in the next year while 43% of mutual fund producers plan to cut their use of mutual funds over the next two years.
Economic conditions are a key concern of advisors and their clients, and Meredith Lloyd Rice, vice president in Escalent’s Cogent Syndicated division, said that with several U.S. bank collapses and fears of recession front of mind, ETFs look increasingly attractive.
“To make the dollar go further, advisors are increasingly turning to ETFs and decreasing allocations to mutual funds to reduce fees and potentially make higher earnings,” she said.
The full report features detailed assessments of leading ETF and mutual fund providers and highlights the importance of asset managers to articulate the value they provide to clients, especially given industry disruption and fee compression.
“While the value proposition and pathway to execution will vary by firm, using thought leadership, promoting partnership-related attributes and exceptional service, or providing value through merger and acquisition activity to achieve greater scale, all firms have a great opportunity to articulate their goals and pursue them based on their place in the market,” Rice added.
Rajesh Markan earlier this year pleaded guilty to one count of criminal fraud related to his sale of fake investments to 10 clients totaling $2.9 million.
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"The outcome is correct, but it's disappointing that FINRA had ample opportunity to investigate the merits of clients' allegations in these claims, including the testimony in the three investor arbitrations with hearings," Jeff Erez, a plaintiff's attorney representing a large portion of the Stifel clients, said.
Chair also praised the passage of stablecoin legislation this week.
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Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.
