and his team just gained a key distribution ally for their next-generation fund structure, NextShares
| Steve Clarke |
Clarke, president of Eaton Vance's NextShares Solutions
, and Jeff Miller
, managing director and head of advice and platforms at UBS Wealth Management Americas
that sometime in 2017 the wirehouse will begin to offer NextShares funds, first through its brokerage platform and then through its fee-based advisory platform. UBS WMA had 7,145 financial advisors working with an average of $147 million each in client assets as of the end of Q1 2016.
"It's a huge development for the business of NextShares," Clarke tells MFWire
. "UBS is the first national, full-service wealth manager to offer NextShares."
Last year Eaton Vance chief Tom Faust confirmed
that the Boston-based mutual fund shop would be willing to help broker-dealers with the technology costs of making NextShares available on platforms. This spring Clarke told MFWire
"that offer is still good but it's not going to be for every broker-dealer forever". Now UBS is benefitting from that offer.
"NextShares Solutions is providing support to UBS in the form of payments to cover technology implementation costs," Miller says, adding that NextShares has also made "a multi-year commitment to cover advisor and investor education and training."
Miller and Clarke declined to talk about the financial specifics of that commitment, and Miller says that it's too early to detail what that education and training will look like.
"We're launching something that doesn't exist today," Miller says. "We have a lot of ideas right now. We're in the formulation stage."
"We don't view it as a particularly difficult implementation. It is different from things we've done before," Miller adds. "Some of the work is just understanding how it's different and how we need to treat it. We've done a lot of that work before."
Miller calls NextShares an "innovative structure" that appeals because UBS and its FAs are "interested in seeing a lower cost, more efficient delivery mechanism for active managers." Clarke, for his part, touts UBS' "well-earned reputation as an industry leader and an innovator."
"We [NextShares and the asset managers preparing NextShares funds] are collectively thrilled to have the opportunity to work with a market leader like UBS," Clarke says.
12 asset managers have so far signed on to offer funds using the NextShares structure. Eaton Vance brought the first several NextShares funds online earlier this year, and Ivy's first NextShares offerings are slated
for release this summer.
"We anticipate a growing platform," Miller says. "We expect more and more investment companies to join and begin to offer products as well."
"One would expect to see a substantial increase in the number of firms that will be offering or planning to offer NextShares," Clarke agrees.
As for UBS FAs and clients using NextShares down the line, Miller confirms that NextShares will eventually be available on both UBS' brokerage and advisory platforms.
"We expect the real growth and demand to be in advisory," Miller says. "Our clients, for the most part, prefer an advisory relationship with us and with our advisors."
NextShares' other distribution partners so far include online brokerage and advisor platform Folio
, online brokerage Interactive Brokers
, and TAMP giant Envestnet
. And this spring Clarke confided that the NextShares team was "in advanced stage conversations... with a platform that supports RIAs" and "a large independent B-D."
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