How using managed ETF portfolios can help advisers grow their business

Managed ETF portfolios provide a highly liquid, transparent and cost-effective solution for advisers who wish to delegate part of the investment management function. It’s worth noting that, in the US, where managed ETF portfolios were born, larger advisory firms now spend over 90% of their time with clients rather than managing investments (source: Cerulli Associates). This increased client focus has led to a deeper understanding of client needs and concerns, and consequently to increased assets-under-management and client referrals.

Managed ETF portfolios are actively managed, broadly diversified portfolios made-up only of ETFs. The portfolios are professionally managed by asset management firms with the qualifications and experience to carry out the asset selection and risk management on an ongoing basis.

The benefits to advisers of using managed ETF portfolios include low costs, instant diversification, high liquidity, transparency, ease of explanation to clients and ease of implementation (often as a “turnkey” core portfolio solution).

Fund selection is carried out by the majority of advisers these days. This delegates most of the investment management function to specialists, whilst the adviser controls the mix of funds, often with a core / satellite approach.