ETP Providers Collaborate To Boost Retail Market

February 20, 2014

Nine leading exchange traded product providers in Europe have joined forces to boost the fledgling retail ETP market in the UK.

The ETP providers in the joint venture are: Vanguard, iShares, SPDR ETFs, Source, UBS, HSBC, Lyxor, ETF Securities and db X-trackers, according to a source.

The group, thought to be called the ETP Retail Forum, is currently still in a nascent stage. The aim of the joint venture is to better educate investors, advisors and others involved in the market, while also improving the overall investment proposition to retail investors from a fund and platform viewpoint.

The UK’s ETP market was given a boost at the start of last year when the Retail Distribution Review (RDR) came into force, but the anticipated uptake of ETPs from retail investors has not materialised as hoped and several challenges remain.

These challenges include costs and technicalities within platform trading, and a lack of real understanding of ETPs and how they can be used in portfolios.

Consequently, the group is exploring solutions that could include engaging with platform providers and putting on joint events to educate the market.

The move will hopefully be a boon to the UK’s ETP market, which has seen providers battling with one another for market share. This group could signal that the providers are finally moving on from the debate over ETF structure – synthetic versus physical.

A spokesperson for the group, told “We will work together to help improve access to ETPs for retail investors in the UK.  The ultimate goal is to help streamline trading costs to the retail investor when investing in these products and arm them with the knowledge and education they need to be able to pick the most suitable product.  We want to make sure they can access them via the many platforms available today as simply and easily as other types of funds.”


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