In the separate accounts space, the rapidly growing exchange traded managed portfolios provide financial advisors with a way to enhance their advisory businesses. However, more education will be required before the industry can take off.
On the recent webcast, Utilizing ETF Strategists to Enhance Your Advisory Business, sponsored by PowerShares and State Street Global Advisors, Adam Grossman, Director of Tactical Strategy for RiverFront Investment Group, Robert D. Williams, Managing Director for Sage, and Brendan Clark, President of Clark Capital Management Group, help explain what ETF strategists do and the best practices for incorporating ETF managed portfolios into an advisory businesses.
Specifically, ETF managed portfolios are investment strategies that hold more than 50% of assets invested in ETFs. A group of ETF Strategists package portfolios of ETFs into investment strategies to meet a wide range of investor demands, providing stand-alone investment strategies or a one-stop complete offering. Many portfolios can be adjusted to adapt to changing market conditions and most employ a rules-based process based on technical or quantitative factors.
According to Morningstar, there were 667 such strategies from 145 firms with $102 billion in assets under management as of June 2014, with existing managers still expanding on their current product offerings.
While the ETF managed portfolio is still growing, many advisors are unfamiliar with ETF managed portfolios and the ETF Strategists who manage the accounts, according to a recent survey of financial advisors.