iShares continues to be the ETF brand advisors trust most despite an expanding set of ETF competitors, including a number of the largest mutual fund managers. Brand trust, along with leadership, represent top drivers of ETF purchase consideration. These and other findings are included in Advisor Brandscape® 2016, a Cogent Reports™ study recently released by Market Strategies International.
As ETF producers report utilizing a greater variety of ETF products and providers, there is plenty of opportunity for new entrants to capitalize on growing market demand for ETFs. According to the financial services research report, Franklin Templeton, J.P. Morgan, and Oppenheimer all earn relatively strong associations in brand trust, ranking among the top 10 brands in the ETF category for the first time this year. Fidelity ranks fifth in brand trust for the second year in a row.
“Well-known active managers relatively new to the ETF market have an opportunity to build upon their credibility as mutual fund providers, particularly in areas of perceived expertise,” said Meredith Lloyd Rice, vice president at Market Strategies and lead author of the report. “That said, these firms still have their work cut out for them to realize their full potential.”
In fact, as advisor interest in smart-beta ETFs surges, it is the perceived category leaders— namely iShares—that appear to have a leg up. iShares achieves the highest consideration as both a rules-based and a passive manager.
Vanguard, which ranks second in consideration as an ETF provider, is the most trusted brand among RIAs. Similar to the mutual fund category, active managers tend to earn weaker ratings within this segment.
“We are seeing a greater variety of ETF products that give firms an opportunity to establish themselves, but the key selection criteria within the category remain the same—trust and leadership are where building the brand starts. Firms will need to demonstrate a commitment to building associations in these areas to challenge the leaders,” said Chris Barnes, senior vice president at Market Strategies.
Top 10 Most Trusted ETF Providers
- State Street/SPDR
- First Trust
- Franklin Templeton
- J.P. Morgan
- Oppenheimer (RevenueShares)
Source: Market Strategies International. Cogent Reports™. Advisor Brandscape®, June 2016.
About the Advisor Brandscape® Report
Cogent Reports conducted an online survey with 1,460 financial advisors from January to March of 2016. In order to qualify, respondents were required to have an active book of business of at least $5 million and offer investment advice or planning services to individual investors on a fee or transactional basis. Cogent Reports set quota targets and weighted the data to be representative of the overall advisor universe using the Discovery Data Financial Services Industry database as a sample source. Market Strategies will supply the exact wording of any survey question upon request.
For more information on the Advisor Brandscape report, review an overview.