In the US, the 2015 survey of financial advisers, conducted by the Journal of Financial Planning and the FPA Research and Practice Institute found that ETFs now surpass mutual funds in popularity as an investment vehicle that advisers use and recommend.
The 2015 Trends in Investing Survey showed that 81 per cent of financial advisers surveyed currently use or recommend ETFs with their clients – the most popular investment vehicle among 17 options. Some 78 per cent of advisers surveyed currently use or recommend mutual funds (non-wrap) with clients.
The findings of the FPA’s Trends in Investing Survey have revealed continued growth in the popularity of ETFs since 2006, when just 40 per cent of survey participants indicated they used or recommended ETFs. This percentage grew to 44 per cent in 2008, and to 79 per cent in 2014 (when mutual funds still reigned with 82 per cent of
advisers using/recommending them).
The 2015 survey indicated that 51 per cent of advisers plan to increase their use or recommendation of ETFs with clients over the next 12 months. No other investment vehicle showed this level of anticipated increased usage. For example, 23 per cent of respondents plan to increase their use of mutual fund wrap programs, and 22 per cent plan to increase their use of individual stocks.
Survey results indicate that only 22 per cent of advisers have used smart beta ETFs with clients in the last 12 months. When asked how their use/recommendation of smart beta ETFs has changed over the last 12 months, 14 per cent of advisers surveyed said it has increased.
The 2015 Trends in Investing Survey also showed that advisers continue to be moving away from annuities, with 38 per cent currently using/recommending variable annuities, compared to 41 percent last year, and a high of 58 per cent in both 2006 and 2008. And 28 per cent of advisers surveyed say they are currently using/recommending fixed annuities with clients, down slightly from 29 per cent last year and a high of 49 per cent in 2010.