ETFs to become more attractive for advisers
The proposed Future of Financial Advice reforms could boost the use of exchange-traded funds (ETFs) by Australian retail investors, according to an industry expert.
The proposed ban on upfront and trailing commissions to financial advisers will encourage advisers to look for solutions that do not carry these types of fees, said Deborah Fuhr, Blackrock global head of ETF research and implementation strategy.
“ETFs will become the ideal solution,” she said.
While the Australian ETF industry has lagged behind its American counterpart, Fuhr believes it is on track to follow global trends and increase by 20 to 30 per cent per year.
Australian ETF assets are expected to surpass US$10 billion by the end of 2013, growing from the current US$6 billion.
According to Russell Investments director of ETFs Amanda Skelly (pictured), the Australian ETF landscape is the reverse of what is happening globally, with retail and self-managed super fund investors taking a lead in ETF usage.
New research from Deloitte Actuaries & Consultants and commissioned by Russell found that while institutional investors have used ETFs in the past, obstacles such as cost and liquidity stand in the way of further use.
Skelley said it was up to the ETF industry to meet the growing needs of the institutional market and educate institutional investors on the different ways they can use ETFs in portfolio management.
Recommended for you
Australian fund managers are actively seeking to launch Cayman versions of their funds to attract offshore flows, with Regal Partners set to launch its latest offering this month.
As private markets gain traction in Australia but only a limited pool of talent is available, three recruiters explore whether fund managers should consider looking overseas to find top talent.
With an explosion of private credit managers appearing in the market, two alternatives experts believe a consolidation is needed to maintain the quality of the sector.
Bentham Asset Management has become the latest fund manager to expand its distribution team as it reports increased interest in its credit strategies.
