ETFs Set to Leap Mutual Funds Among Advisors: Cerulli

Financial advisors’ dependence on exchange-traded funds is steadily rising, with client assets in these products expected to exceed those in mutual funds within around one year.

Advisors project that 25% of their clients’ assets will be allocated to ETFs by 2026, while just 24% will be invested in mutual funds, as reported by Boston-based wealth management consultancy Cerulli Associates.

ETFs have gained popularity among wirehouse advisors and independent registered advisory firms. Cerulli reported that the two channels comprise 54.6% of total retail ETF assets.

Advisors are increasingly depending on product information and assistance from wholesalers, either directly or via their home office, to navigate their options.

Cerulli reported that advisors find “competitive product information” most beneficial, with 41% citing it, followed by client-approved instructional or marketing materials at 37%, and access to portfolio managers or product specialists at 32%.

“Advisor allocations to ETFs increase as they become more comfortable with the product and its use across asset classes, which is propelled by increased product education,” Cerulli director Daniil Shapiro said in a statement.