A new trend in exchange traded funds (ETFs) is emerging: large brokerages that have traditionally offered mutual funds to their clients are looking to hop on the bandwagon.
Although the mutual fund industry is about $11 trillion strong, assets have been moving away. Last month alone, $13.2 billion moved out of mutual funds and $4.8 billion went into ETFs, Helen Kearny for Reuters explains.
It’s no surprise then that larger banks – Bank of America, Merrill Lynch, Morgan Stanley and Wells Fargo – are looking for their piece of the pie. They’ve traditionally offered mutual funds to their clients, but the interest in ETF has grabbed their attention. In November of last year, Schwab jumped into the industry and has seen success. [Schwab Hits $1 Billion in Assets.]
Unfortunately for them, ETF providers have refused to enter into profit-sharing arrangements with the big “wirehouse” brokerages, which is why the larger wirehouses have not been pushing their advisers to incorporate ETFs into their portfolios. [Where to Find Cheap ETF Trades.]