ETFs for MDFA advisors

Although ETFs are a hot commodity, thousands of financial advisors operating on the MFDA platform are unable to sell them—or else lack the appropriate clearing capability to do so.

By Investor Economics | April 12, 2013 | Last updated on April 12, 2013

1 min read

Although ETFs are a hot commodity, thousands of financial advisors operating on the MFDA platform are unable to sell them—or else lack the appropriate clearing capability to do so.

The perceived gap has prompted mutual fund providers to begin offering funds that invest directly in a single ETF or basket of ETFs, thereby opening the route for financial advisors to access the popular product structure.

An alternative to traditional index funds, mutual fundswrapping ETFs appear to have carved out a niche by bringing ETFs to the masses of MFDA advisors. At a lower price point than actively managed mutual funds—also paying a trailer and being available in multiple load options—these funds are likely to experience continued growth, although the segment could become increasingly crowded as more players set their sights on this sub-segment.