FAs See Models, ETFs, and SMAs on the Rise Post-Pandemic
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Wednesday, September 23, 2020

FAs See Models, ETFs, and SMAs on the Rise Post-Pandemic

Just as the coronavirus crisis seems to have accelerated shifts to online retail or streaming video services, it looks like the situation is also boosting preexisting trends in wealth management, too.

Matthew "Matt" Schiffman
Broadridge Financial Solutions, Inc.
Principal, Distribution Insights
New research from Broadridge Financial Solutions, released on Monday, suggests that financial advisors expect to continue shifting towards certain types of products. Indeed, 53 percent of FAs said they expect to increase their use of models over the next two years (while only 4 percent plan to decrease it).

Over the past six months (i.e. during the COVID-19 pandemic in the U.S.), 41 percent of FAs have increased their use of ETFs (while only 6 percent have decreased such use) and 22 percent have increased their use of SMAs (while only 6 percent decreased it). Looking ahead, FAs expect that trend to continue, with 58 percent expecting to boost their ETF usage over the next two years and 34 percent expecting to boost their SMA usage (compared to 4 percent and 8 percent expecting to decrease those, respectively).

The research also digs into several other topics, including: advisors' success (or lack thereof) with the WFH shift; their plans to return to the office; their perceptions of asset managers and their wholesalers; and the rise of ESG options.

"As distribution organizations face the new reality of advisors working from home for an extended period of time, they need to adapt their outreach and support strategies in order to meet advisors where they are — at home and online," states Matthew Schiffman, principal of distribution insights at Broadridge. "The bar has now been raised, and the video conferencing wall is not coming down."

8 Acre Perspective Corp. conducted the survey for Broadridge, reaching 401 FAs (including some from wirehouses, some from regional B-Ds, some from IBDs, and some from RIAs) in July and August.

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