Pershing to roll out a no-transaction-fee ETF platform

The platform, named FundVest ETF, will initially offer 120 ETFs.
JUN 15, 2017

BNY Mellon's Pershing is rolling out a no-transaction-fee ETF platform in an effort to give financial advisers more access to what they desire, the company announced Thursday. The new platform, FundVest ETF, was unveiled by Pershing chief executive Lisa Dolly during her morning keynote address at the company's Insite conference in San Diego. Justin Fay, Pershing's director of financial solutions, said inflows into ETFs on the Pershing platform increased by 20% in 2016, compared to 2015. So far this year, net flows of ETFs on the Pershing platform have exceeded $13 billion, and are on track to eclipse the net flows for all of last year by the end of June, Mr. Fay said. Also, in a recent Pershing survey of 1,500 advisers, more than two-thirds of respondents who use ETFs said they intend to increase their usage over the next 12 months. "As the demand for ETFs continues to increase, we are pleased to bring our clients a diverse selection of no-fee ETFs offered on an independent, open architecture platform," Mr. Fay said. "We are hitting record volume pretty much every month." He cited a "confluence of factors" as the drivers behind the strong ETF sales. "The ETF industry has done a great job of educating investors on the benefits of using ETFs," he said. "There's also the increased focus on fees, especially in relation to the DOL rule." Todd Rosenbluth, director of ETF and mutual fund research at CFRA, said, "The move by Pershing will help drive further ETF adoption." "Advisers are increasingly using ETFs as a replacement for individual stocks and mutual funds," Mr. Rosenbluth added. "ETF expense ratios continue to come down as asset managers compete, and amid strong inflows." The no-transaction-fee ETF platform joins Pershing's 20-year-old no-transaction-fee mutual fund platform, which has not suffered from slower net flows as ETF flows have ramped up, according to Mr. Fay. FundVest ETF will initially offer 120 ETFs from providers including Direxion, Guggenheim Investments, PowerShares by Invesco, OppenheimerFunds, Pimco, Reality Shares, and SPDR ETFs from State Street Global Advisors. Pershing managing director Robert Cirrotti said the ETF providers will be compensating Pershing to make up for some of the revenue that will be lost by removing the transaction fees. He declined to say exactly how much revenue Pershing was making by charging transaction fees on ETFs.

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