Today, we conclude our four-part blog series on the state of the ETF market by dispelling two additional ETF misconceptions that were held by our polled MFDA advisors. We hope you’ve found this series useful, especially if your firm is considering adding ETFs to your product suite and requires a technology partner like Univeris to make ETF trading happen.
Misconception: MFDA Advisors Lack Sufficient Access to Knowledge and Training of ETFs
The resources below will help to turn this misconception on its head.
In Canada, the first ETF was listed in March 1990. You may remember it by its acronym, ”TIPs,” which stood for Toronto 35 Index Participation Units (it still operates today but evolved into iShares S&P/TSX 60 Index ETF or “XIU”). In the three-plus decades that have passed since TIPs hit the scene, ETFs have proliferated, even eclipsing mutual fund net sales in recent years. With ETF popularity soaring, the MFDA, fund manufacturers and other accredited institutions have moved in lock step to promote awareness and education of these investments to investors through a variety of resources: articles, guides, fact sheets, conferences/webinars and proficiency courses to enable advisors to sell ETFs. Needless to say, there is a lot of useful information to help advisors understand ETFs and incorporate them into their clients’ portfolios.
To help you navigate through all of the content that’s out there, we’ve rounded up some helpful ETF knowledge and training resources for you:
Advisor Business Strategy
Growing your Practice with ETFs
Misconception: Clients are Not Interested in ETFs
Given the explosive growth of the ETF industry and rising net inflows into this product class, there does indeed appear to be an appetite for ETFs and their benefits. Of course, they may not have a place in all of your clients’ portfolios but they could be incorporated into some. Their use will depend on your clients’ preferences and their investment needs and whether you’re licensed to sell them. Even if ETFs aren’t part of a portfolio’s mix today, that’s not to say clients are any less interested in them or that they wouldn’t invest in them in the future.
Additionally, ETFs continue to figure prominently in financial media and investment advice columns, often comparing them favorably with other product classes. The trends that have contributed to their popularity (think do-it-yourself investing, low-cost investing, tax efficiency, fee sensitivity, etc.) are all as relevant today as they have been through the decades. It is therefore more likely for interest in this asset class to keep growing rather than to idle or wane, as confidence in and demand for these products expand.