Exchange traded funds are gaining the upper hand among financial advisors who are looking for better investment alternatives to traditional, open-end mutual funds.

According to a recent Financial Planning Association survey of advisors, 81% of respondents use or recommend ETFs with their clients, whereas 78% of advisors surveyed use or recommend mutual funds. [What an All-ETF Portfolio Does for You]

“For the first time since FPA began surveying planning professionals on their use and recommendation of various investments in 2006, ETFs have surpassed mutual funds in popularity,” according to FPA.

The survey reveals the growth in popularity of ETFs among financial advisors, with just 40% of participants using or recommending ETFs in 2006, and 79% in 2014 when mutual funds still held the top spot among 82% of advisors.

Advisors are enjoying a myriad of benefits that the ETF investment vehicle had over mutual funds, with 76% of participants pointing to lower costs as the most significant advantage, followed by 55% tax efficiency, 50% trading flexibility and 22% transparency. [Investing in ETFs: Put a Dollar Figure on Your Fund Fees]

Todd Rosenbluth, director of mutual fund and ETF research at S&P Capital IQ, also argued that the ETF industry’s growth is attributed to the expanding product line, ease of use and trend toward greater customization, reports Jeff Benjamin for InvestmentNews.

“I think we’re seeing advisers increasingly wanting to build their own portfolios or outsource the building of customized portfolios, and ETFs are a great tool for that,” Rosenbluth said in the InvestmentNews article.

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