Explore the benefits of integrating ETFs into your firm’s product offerings. Learn how they can help grow your client base, showcase your proprietary models, and serve as a valuable cross-selling tool.
Have you considered adding exchange-traded funds (ETFs) to your firm's product offerings?
ETFs have become increasingly popular investment vehicles due to their versatility and wide-ranging appeal. By incorporating ETFs into your firm's product offering, you can attract a broader range of clients and enhance the firm’s marketability.
ETFs as Cross-Selling Tools
ETFs offer exposure to various asset classes, sectors, and investment strategies, which can appeal to new and existing clients. With potentially lower costs and higher liquidity compared to other investment vehicles, ETFs are a compelling option for clients seeking portfolio diversification. Offering ETFs alongside your traditional investment vehicles allows your firm to expand its reach and cater to your client's evolving needs.
Lowering Entry Barriers
Compared to separately managed accounts (SMAs), with minimum investments typically starting at about $100,000 or more, ETFs have significantly lower barriers to entry since the typical investment minimum is the ETFs market price per share. This allows clients who may not meet the higher minimum investment requirements of traditional products to gain exposure to a variety of investment strategies that may have previously been out of reach.
The lower entry point of ETFs also makes them an ideal tool for asset managers looking to implement asset allocation strategies for their clients. With ETFs, you can easily construct diversified portfolios that span multiple asset classes and sectors without the need for large initial investments. Clients can even transition from SMAs and mutual funds to ETFs, possibly enhancing tax efficiency.
Showcase Your Expertise
One key benefit of using ETFs to showcase your proprietary models is the increased visibility and accessibility they provide. Unlike privately managed accounts or hedge funds, which may have limited transparency, ETFs are publicly traded and highly transparent. This allows potential clients to evaluate the performance of a fund, clearly demonstrating your firm's investment prowess. The public nature of ETFs, and the ability to heavily market them, may help grow many aspects of your current business.
Additionally, packaging your proprietary models into ETFs allows you to tap into the growing demand for innovative and differentiated investment vehicles. Investors continue to seek strategies that go beyond traditional market cap-weighted indexing, and proprietary ETFs can offer a compelling alternative.
Strategic Benefits for Institutional Clients
An ETF fund family can bring significant benefits for institutional clients such as:
- Cost-Effectiveness: With lower expense ratios compared to mutual funds or SMAs, ETFs can provide significant cost savings for large institutional portfolios.
- Efficient Access to Market Segments: Gaining exposure to specific market segments or investment strategies through ETFs can simplify the investment process and allow for greater flexibility overall.
- Revenue Growth Potential: The potential for Increased assets under management from institutional clients can generate higher revenue for your firm.
- Deepening Client Relationships: Offering ETFs positions your firm as a one-stop shop for investment needs, leading to increased client loyalty and the potential for more assets under management.
- Tax Efficiency: ETFs can offer unique tax benefits compared to mutual funds, potentially enhancing after-tax returns for institutional clients.
- Publicity and Branding: Creating your own ETF is your firm's ethos encapsulated in a tradeable format for all to see.
Ready to grow your strategy?
In today's competitive financial landscape, incorporating ETFs into your product offering can provide the edge you need to reach the next level for your firm.
ETFs are versatile, accessible, and cost-effective, so you can showcase your expertise and round out your product offering while attracting a wider range of clients.
Whether you aim to deepen relationships, expand your reach, or provide more options to customers, ETFs can help you achieve your goals. Contact us today to learn more about how Exchange Traded Concepts can help you launch your own ETFs to complement your product offerings.
Important Disclosures
Exchange Traded Concepts is an SEC Registered Investment Adviser. The Firm's Form ADV is publicly available and can be found here: https://www.adviserinfo.sec.gov/Firm/151197. ETC may be subject to various conflicts of interest in the provision of its services. Potential conflicts of interest shall be identified in the Firm's Form ADV. The Exchange Traded Funds are referred to as "Funds" for purposes of this document. ETC transacts business in the United States and other jurisdictions where it is properly registered or excluded or exempted from registration requirements. This document does not constitute an offer of services in jurisdictions where ETC does not have the necessary licenses.
No representation is made that any Fund's investment process, objectives, goals or risk management techniques will or are likely to be achieved or be successful or that any Fund or any underlying investment will make any profit or will not sustain losses. The risks of investing in a Fund will not be negated by ETC's Fund services, and no assurance is given that a Fund will not be exposed to risks of significant trading losses.
The information provided herein does not constitute tax, legal or accounting advice. ETC does not provide legal, financial, accounting or tax advice. Clients and prospective Clients, as well as investors and prospective investors in a Fund ("Investors") are advised to seek the counsel of their own legal, financial and tax advisors for all matters relating to the services and structures contemplated herein. Each Investor (either alone or with its professional advisors) is solely responsible for its own due diligence, risk assessment and tolerance, investment objectives, any decision to invest in a Fund, and for monitoring its investment for purposes of determining whether it wishes to remain invested in such product and whether such product continues to be appropriate for its circumstances and requirements.
The information provided herein: (a) is provided as of the date indicated, (b) is in summary only and is not complete, and (c) is subject to change at any time without notice. Certain information provided by ETC is based on third-party sources and, although generally believed to be reliable, has not been independently verified. ETC is not responsible for errors or omissions from these sources. No representation is made with respect to the accuracy, completeness, or timeliness of such information, and ETC assumes no obligation to update or otherwise revise such information. In no event will ETC be liable to any party for any direct, indirect, incidental, exemplary, compensatory, punitive, special or consequential damages, costs, expenses, legal fees or losses (including, without limitation, lost income or lost profits and opportunity costs) in connection with the use of the information contained herein, even if advised of the possibility of such damages. ETC and its respective employees and its affiliates hereby exclude, to the extent permitted by applicable law, all liability in connection with the use of the information herein.
Interests in Funds will not be insured by the FDIC, the SIPC or any other organization, will not be deposits of any bank, and are not guaranteed by any bank.