Prepping ETFs, a Giant Declares "No Interest" In Direct Retail
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Wednesday, August 05, 2020

Prepping ETFs, a Giant Declares "No Interest" In Direct Retail

"ETFs are accessible at the retail level but we have no interest whatsoever in working with retail clients."

David Paul "Dave" Butler
Dimensional Fund Advisors
Dave Butler, co-CEO of Dimensional Fund Advisors (DFA [profile]), shares that tidbit in a Bloomberg piece pondering the Austin, Texas-based fund firm's history in advance of the launch of the first DFA ETFs (a planned move that came to light earlier this summer). The piece underscores DFA's longstanding commitment to distribution exclusively through institutional channels and its network of trained advisor allies.

"That's a really big deal," Michael Kitces, a head of planning strategy at DFA user Buckingham Wealth Partner, tells Bloomberg. "DFA is one of the biggest success stories of being exclusively advisor-sold."

"[Butler] says the quant giant has no intention to make any wholesale adjustments to its business model," Bloomberg writes.

"We're an asset manager, that's all we do," Butler tells the publication. "We don't do advice."

The piece offers an overview of DFA's specific business model and history. It also highlights DFA's recent flows woes in light of the underperformance of value and small cap stocks.

"Everything that made DFA this big cult in the early to mid-2000s turned against them," Rick Ferri, founder of Ferri Investment Solutions and another DFA user, tells Bloomberg. "It's a changing marketplace and DFA finally came around and said, 'We will provide [ETFs].'"

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