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iShares offers ETF guide
iShares has launched a guide for financial advisers aimed at guiding them around the technicalities of exchange-traded funds.
The guide sums up ETFs as "simple, index tracking investments that offer clients a range of tangible benefits in an easy to understand package".
iShares said that ETFs have become an "essential portfolio building block, offering diversification, transparency and liquidity, all at a lower cost than many traditional mutual funds".
The guide offers information such as the benefits of the products and how they can be included in client portfolios, and what advisers should look for when selecting ETFs and what the tax implications are.
The sections of the guide include chapters on market growth, comparing ETFs and mutual funds, getting the best from active and index trading funds, selecting the right ETF, asset allocation and the its role, reasons why, iShares ETFs listed on the London Stock Exchange and regulatory information.
The guide also stated that since the launch of the first ETF in the US in 1993, the industry has experienced phenomenal growth.
By the end of June this year there were 1707 ETFs available globally from 93 providers, with 3066 listings and assets of £498bn, iShares said.
The guide points out that ETFs have been cited within the retail distribution review as one of the packaged products that the IFAs are encouraged to familiarise themselves with and consider in their recommendations to clients.
It summarises the products as ready for the retail distribution review, stating that they fit into the new adviser charging model proposed by the FSA.
Martin Bamford, chartered financial planner of Surrey-based IFA Informed Choice, said: "At face value, ETFs do look simple, but once you start delving into the technicalities, they can be very different from each other. There is lots to explain to clients."
"The more information there is for IFAs to further educate themselves about ETFs, the better. The guide is a great starting point."
Stephen Jennings, an IFA for Berkshire-based Jennings Wealth Management said: "I have just requested a copy of the guide. ETFs are now much more on the radar for IFAs and the more information available about them the better."