Mutual funds have long been the investment tool of choice, but a new report from Cogent Research says that financial advisors will increasingly embrace more sophisticated tools — including exchange traded funds (ETFs) — over the next two years.

The survey revealed that the open-end mutual fund will lose more than 10% of its portion of the product mix by 2009. Some of the reasons given for the possible decline are better technology and more pressure on advisors to be productive wealth managers.

The most dramatic shifts, the study found, will likely take place in the realm of separately managed accounts and ETFs. That’s no surprise, really: ETFs make it easy for investors to diversify, do asset allocation and have access to different markets. We’ve seen a lot of growth in the ETF marketplace, but with more advisors using them, the growth will continue.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.