InvestmentsNov 2 2015

A third expect to increase exposure to ETFs

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A third expect to increase exposure to ETFs

Research conducted by ETF provider Source found that 82 per cent of IFAs feel ETFs need to be more available with 42 per cent believing that their clients have no exposure to ETFs at all.

While 34 per cent of 103 advisers polled in August expected their clients to increase their exposure to ETFs in the next year, 33 per cent of IFAs promoted pure trackers in comparison to the 15 per cent who suggested active ETFs.

Those suveyed also suggested that low charges, product range and the innovation offered imakes investing in ETFs appealing for clients.

Take-up has also been fuelled by the implementation of the Retail Distribution Review (RDR), David Lake, managing director for UK coverage at Source.

Mr Lake said: “The bulk of investment into ETFs in Europe so far has come from institutional investors, but we expect IFAs to significantly increase their clients’ exposure to these products.

“We are well positioned to capitalise as we have just launched a multi-million pound advertising campaign to help raise our profile amongst IFAs and investors, and we have recently appointed a five-strong team to service the UK financial advisory market.”

Dean Mullaly, MD/IFA for UK and international at Mark Dean Wealth Management, said: “I think there is an increased popularity for ETFs, particularly since the RDR which means that financial advisers have to consider them as part of their investment strategy.

“It is likely that usage in this area will increase. With financial advisers being told to use them, they are starting to realise that they have strong potential meaning they obviously going to use them more.

“Of course not all ETFs are appealing to all investors and some areas such as US commodities will always perform significantly stronger than others. You also have a lot of clients asking about ETFs because they are cheap, so it is important to focus on value as opposed to cost.

“An active fund may cost more, but it may also offer a better return of investment.”