Financial advisors have begun adopting exchange traded funds and are planning to increase their exposure to the investment wrapper. However, many are daunted by the multitude of options now available.

According to an informal S&P Capital IQ survey conducted at the ETF Virtual Summit, advisors invest only a relatively small portion of client assets in ETFs and don’t always take advantage of the tools available, reports Carl O’Donnell for InvestmentNews.

Specifically, half of respondents reveal that less than 20% of clients’ assets are in ETFs while 12% hold 60% or more in the funds. The survey was based on 150 financial advisors who are more involved in the ETF space.

Todd Rosenbluth, director of ETF and mutual fund research at S&P Capital IQ, points out that mutual funds still remain the most popular investment tool, pointing to the lack of knowledge in the ETF space as a major hurdle. For instance, many advisors would often stick to one or two companies they know well, like BlackRock’s iShares or Vanguard. [ETFs Driving BlackRock Profit Growth]

“There are good facts on ETF providers’ websites, but there is not perspective on how that ETF ranks relative to others,” Rosenbluth said in the article. “Advisers don’t have the time to go through six different providers’ websites to understand ETFs.”

Moreover, advisors typically invest with their wallet, with 56% of respondents choosing ETFs based on expense ratios and 58% considering bid-ask spreads as a key factor, while only 13% looked into specific securities holdings.

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