NEW YORK, July 16, 2019 /PRNewswire/ -- A vast
majority of financial advisors find the concept of actively
managed, nontransparent exchange traded funds (ETFs) appealing,
according to new data released today by Broadridge Financial
Solutions, Inc. (NYSE: BR), a global Fintech leader and part
of the S&P 500® Index that tracks $4
trillion of intermediary-held ETF assets under management.
Actively managed nontransparent ETFs, which recently received SEC
approval via Precidian ActiveShares in June
2019, allow fund managers to disclose holdings on a
quarterly basis, ultimately keeping holdings more confidential than
with traditional transparent ETFs.
The survey reveals that financial advisors are ready to allocate
assets to active nontransparent ETFs, with more than 4 in 5
advisors (83%) currently hoping their favorite active mutual funds
become available in a nontransparent ETF structure. These solutions
have been referred to within the industry in a variety of
additional ways, including: active ETFs, opaque ETFs,
nontransparent ETFs and semi-transparent ETFs.
Low Awareness, High Appeal, Promising Opportunity
Advisors currently have a low level of awareness of ActiveShares
but find the concept and definition of active nontransparent ETFs
appealing. Only 4% of advisors report being "very familiar" with
ActiveShares, while 37% are entirely not aware and another 37% have
heard of the name but know nothing about the technology.
Nevertheless, when presented with the concept of active
nontransparent ETFs, 85% of advisors stated that they were
interested in the concept.
"There is a clear awareness and learning curve among financial
advisors given how recently the SEC has approved active
nontransparent ETF technology," said Matthew Schiffman, principal for Distribution
Insight, Broadridge Financial Solutions. "What is interesting is
the level of comfort advisors already have with the concept of
active, opaque ETFs – and how quickly they would plan to allocate
assets to these products."
The adoption timeline for nontransparent ETFs among financial
advisors generally correlates with their current awareness levels,
with 22% of advisors stating they would use such products within 12
months and an additional 64% stating they would do so after 12
months of introduction to the market. Key influences on an
advisor's confidence in using this type of solution include product
performance record (69%), good liquidity/daily trading volume (68%)
and asset manager brand strength (55%). Advisors' top concern is
that active nontransparent ETFs are too new and untested in the
market.
Opportunities for Asset Managers to Educate, Gain Market
Share
Advisors' usage expectations are already high, with 85% of
advisors stating they are likely to use active nontransparent ETFs
and 72% expecting asset managers to introduce funds on the
ActiveShares platform. Nearly 1 in 2 advisors (46%) foresee
allocating new, not-yet-invested assets to nontransparent ETFs,
underlining the opportunity for active managers and investors
alike. Meanwhile, 63% of advisors foresee active nontransparent ETF
assets being re-allocated from actively managed open-end mutual
funds.
More than 4 in 5 advisors (82%) are interested in learning more
about semi-transparent ETFs, and they are most likely to seek
product information and education via in-person meetings with
wholesalers (49%), followed by email (35%), webinars (27%)
discussions with portfolio consultants (27%) and asset manager
websites (26%). Advisors who are most interested in learning more
about active nontransparent ETFs also prefer one-to-one personal
discussions over automated digital interactions.
"Active nontransparent ETFs are likely to be additive to the
asset management landscape, as the advisors we surveyed expect to
allocate entirely new assets as well as assets from other ETFs and
passive open-end mutual funds," added Schiffman. "Asset managers
shouldn't let this moment pass, as they now have a prime
opportunity to further engage with advisors, primarily through
wholesalers and other one-to-one channels."
To download a summary of the survey results, click here.
Methodology
This Broadridge survey was conducted by Q8 Research, LLC to
gauge advisor interest in nontransparent ETFs following recent
action by the SEC. A total of 200 financial advisors across
channels completed the survey, which was fielded in June 2019. For further details on survey
methodology, please contact a Broadridge media representative.
About Broadridge
Broadridge Financial Solutions, Inc. (NYSE: BR) a $4 billion global Fintech leader and a member of
the S&P 500, is a leading provider of investor communications
and technology-driven solutions to banks, broker-dealers, asset
managers and corporate issuers globally. Broadridge's investor
communications, securities processing and managed services
solutions help clients reduce their capital investments in
operations infrastructure, allowing them to increase their focus on
core business activities. With over 50 years of experience,
Broadridge's infrastructure underpins proxy voting services for
over 50 percent of public companies and mutual funds globally, and
processes on average more than US $5
trillion in fixed income and equity trades per day.
Broadridge employs over 10,000 full-time associates in 18
countries.
For more information about Broadridge, please
visit www.broadridge.com.
Media Contacts:
Matthew Luongo
Prosek Partners
+1 646-396-0966
mluongo@prosek.com
Linda Namias
Broadridge Financial Solutions
+1 631-254-7711
Linda.Namias@broadridge.com
View original
content:http://www.prnewswire.com/news-releases/financial-advisors-poised-to-allocate-assets-to-active-nontransparent-etfs-broadridge-survey-reveals-300884898.html
SOURCE Broadridge Financial Solutions, Inc.