IFAs show keenness to sell ETFs

ETFsMany independent financial advisers (IFAs) in the UK want platforms to make exchange-traded funds (ETFs) more widely available, a survey indicates.

A survey of 103 advisers by Source ETF also shows that since the UK implemented the Retail Distribution Review (RDR), more IFAs have placed their clients in passive investments.

According to Source, which earlier this year launched a multi-million pound advertising campaign for its ETF range, 82% of IFAs call for ETFs to be more widely available on platforms and 9% of them have significantly increased their clients’ exposure to passive investments since the RDR.

By ending payments from funds to IFA intermediaries, the RDR attempted to remove selection bias by IFAs, who supposedly favoured active over passive funds because passive funds paid lower commissions or none at all.

Only between 1% and 10% of clients are invested in ETFs at present, according to nearly half of the IFAs surveyed, but 34% of the advisers expect their clients to increase exposure to ETFs over the next year. However, 4% expect ETF exposure to decline. 

By coincidence, the UK platform belonging to Fidelity, FundsNetwork, today announces that from December 2015, it will broaden the range of ETFs that it offers from the likes of ETF Securities, HSBC, iShares and Vanguard.

©2015 funds europe