Exchange traded funds (ETFs) have been infiltrating various corners of the market, from retail investors to hedge funds and 401(k)s. Now it can welcome fee-based advisors to the fold.
Advisors are increasingly shifting to a fee-based models as regulators crack down on possible conflicts of interest. As more advisors who embrace the fee model move over to ETFs, the industry may see it translate into big asset growth, Daisey Maxey for The Wall Street Journal reports. [Vanguard Is Tops With ETF Providers.]
Fee-based advisers tend to have their own investment strategies and disciplines, and the use of easily traded, relatively low-cost ETFs fits well with these. For fee-based advisers, ETFs are a perfect tool to dictate asset allocation. Advisers are more nimble in increasing and decreasing allocations to different asset classes and ETFs have great liquidity, making them an ideal tool for any kind of discipline. [What Is An ETF?]
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Tisha Guerrero contributed to this article.
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.