ETF.com has been doing an investor survey with Brown Brothers Harriman for five years now. The survey is designed to look at how financial advisors are using ETFs in their practices. Over the years, the questions have evolved, and the focus has honed in more sharply on registered investment advisors.
With the current survey posted and ready for your input, we’re taking a look at a few of the highlights that can be sussed out from four years of data.
When ranking selection criteria, the parameters of the question changed somewhat over the years, with more choices being added, so the comparison isn’t direct.
However, it is notable that strategy/exposure went from being selected as the most important criteria by 58.5% of respondents in 2013 to being selected by 38% of respondents as their first choice in 2016. And that’s been a fairly consistent decline over the years.
Expense ratio got 12.5% of the first-place vote in 2013, but 25% in 2016. Historical performance got 6.6% of the vote in 2013 and 11% of the vote in 2016, an increase that may reflect the growth of actively managed funds.
When asked how much a new fund needs in assets before financial advisors will consider it, in 2013, 19% said they needed to see at least $10 million, while 39% were comfortable with $50 million and 32% required at least $100 million.
The distribution of the top three answers in 2016 shows a shift in favoring ETFs with higher levels of assets, with 13% still comfortable with $10 million and 37% and 43% comfortable at the $50 million and $100 million AUM levels, respectively.
Looking at the outlier choices of $0 and $1 billion for minimum assets, perhaps most interesting is that 5% of respondents in 2013 and 2016 said they would buy a new ETF with no assets. At the same time, the number of respondents requiring more than $1 billion in AUM fell by more than half, from more than 4% in 2013 to 2% in 2016.
Unsurprisingly, when ranking ETF issuers in terms of brand reputation, the numbers have held fairly steady over the years, with BlackRock, Vanguard and State Street Global Advisors claiming the top three spots.
The responses to that question have become a bit of a given, even while the number of respondents ranking issuer or brand as the most important selection criteria has fallen from 13% to 8% between 2013 and 2016. For that reason, after four years of including it in the survey, we excluded the question on brand reputation from this year’s list of questions in the interests of streamlining.
Please check out the current survey, which will be live until Oct. 2. Financial advisors completing the survey will be rewarded with an electronic copy of Cerulli Associates’ “Advisor Edge: The Practice Management Issue,” and a $100 discount when they sign up to attend the annual Inside ETFs conference, which takes place next year, Jan. 21-24 at the Diplomat Beach Resort in Hollywood, Florida. They’ll also be entered to win a free pass to the conference.
Contact Heather Bell at [email protected]