"The committee itself will determine the topics and issues facing the ETF industry that they want to pursue first," Bond said. He adds that between the size of the ETF industry and the ICI, they hope to use their strength to address the issues.
If this new committee’s proposals aren’t accepted by the ICI membership right out of the gate, I’d expect Mr. Bond will be very vocal.
I think the jury is still out as to the effectiveness of this committee. The priorities of ETF providers clearly do not align with the priorities of conventional mutual fund companies for a few important reasons:
- There’s an ongoing need for ETF education not only for individuals, but financial advisors as well. As more investors understand and utilize ETFs, assets will come at the expense of underperforming fund companies.
- Congress is looking closely at fees disclosure in investments and retirement plans. This bodes well for ETF providers, as expense ratios in most cases are a fraction of what they are in conventional funds.
- ETF providers are justified in feeling strongly that ETFs should play a role in 401k investment options. Conventional mutual fund companies and plan providers are clearly not motivated to include ETFs while sacrificing the lucrative fees.