Survey reveals strong growth in financial adviser use of ETFs

Jun 4th, 2014 | By | Category: ETF and Index News

ETF STRATEGY NEWS! ETF Strategy is delighted to announce the launch of ETF Strategy Hub (hub.etfstrategy.com), an on-demand repository of webcasts, videos, podcasts and white papers. Debuting with Special Series on Technology & Innovation in China and the Digital Economy.


Financial adviser use and recommendation of exchange-traded funds (ETFs) continues to grow, outpacing all other investment vehicles, according to a survey by the Journal of Financial Planning and the FPA Research and Practice Institute.

Survey reveals steady growth in financial adviser use of ETFs

Financial adviser use and recommendation of ETFs continues to grow, outpacing all other investment vehicles, according to a survey by the Journal of Financial Planning and the FPA Research and Practice Institute.

The survey, conducted in March 2014, showed that 79 percent of US financial advisers now use or recommend ETFs to their clients, up from just 40 percent in 2006.

No other investment vehicle has shown more growth in its use than ETFs. Thirty-nine percent of planners surveyed indicated they plan to increase their use of ETFs over the next 12 months—the highest anticipated increase among 17 investment vehicles.

Although the majority of advisers (57 percent) believe a blend of active and passive management provides the best overall investment performance (taking into account costs associated with each style), more advisers are likely to have increased their use of passively managed funds, including ETFs, over the last year (30 percent), then actively managed funds (18 percent).

The results also indicate an overall increased use of cash and equivalents since 2006, when just 53 percent of planners surveyed were using/recommending cash, compared to 79 percent today. Advisers also seem to be moving away from annuities, with 41 percent currently using/recommending variable annuities, compared to a high of 58 percent in both 2006 and 2008. And 29 percent of planners surveyed say they are currently using/recommending fixed annuities with clients, down from a high of 49 percent in 2010.

Commenting on the findings, Valerie Porter, Director of the FPA Research and Practice Institute, said: “The study seems to point to a shift toward investments with greater transparency and liquidity. Perhaps advisers are responding to consumers’ demand for lower cost investments that allow them to be more nimble in their investment approach. And I think it’s safe to say everyone values cash a little more since last decade’s market collapse.”

Whilst the survey results pertain to the US intermediary and advisory market, similar trends can be seen in Europe.

Tags: ,

Leave a Comment