Lisa Shidler

Windhaven's success draws attention to emerging ETF managers

State Street's Anthony Rochte: Some ETF managers are building true institutional-powered portfolios. Some have strong performance records and can take their solution and market it to other RIAs or investors.

Schwab

BlackRock

State Street

Windhaven

ValMark

Metropolitan Capital Strategies

A look at the numbers shows that exchange traded funds are starting to move in lockstep with RIAs and vice-versa. RIAs invested $496 billion in ETFs in the 12-month period ended June 30, 2015 – that’s a $78 billion increase compared to the same period the year before. By comparison, the wirehouse channel added 20% fewer ETF assets, or $397 billion in the last year; granted, an amount that was $70 billion greater than its aggregate investment during the same 12-month period the year before, according to Broadridge Financial Solutions. RIAs that manage portfolios and make discretionary investment choices for their clients value ETFs because they provide advisors with easy access to market segments at a cheap price – an especially important factor for RIAs who are compensated on an asset-fee basis. Fee-based advisors appreciate ETFs’ tax efficiency, liquidity and broad exposure at low cost. Conversely, RIAs are a prized channel for ETF-makers like State Street, Invesco, PowerShares, Vanguard Group and BlackRock. ETFs are also a major ingredient in portfolios devised by robo-advisors -- essentially automated RIAs -- for the mass affluent who invest more than 90% of their assets using ETFs.

ETFs

Outsourced investments are one of the fastest-growing categories in the financial advisory world. Perched between
the asset custodian and the financial advisor, these (mostly) turnkey asset management programs can handle all or a 
portion of their investing, technology and fiduciary duties.

Advocates of using these TAMPs point to how it's better for the advisor because it frees up more time to spend with clients and prospects. It's also better for clients because the duties are being handled by specialized professionals who benefit from economies of scale.

Skeptics say that it adds a layer of cost and takes away an element of control from the advisors in executing according to a client's financial plan.

TAMPs

Aided by big companies like State Street and BlackRock, managers offer a leg up to RIAs seeking ETF strategies

Windhaven's success draws attention to emerging ETF managers

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Windhaven's success draws attention to emerging ETF managers

Related Moves

June 7, 2024 at 1:44 AM

July 26, 2023 at 2:34 AM

March 25, 2023 at 1:32 AM

January 13, 2023 at 3:01 AM

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