ETF Providers Look To Level Playing Field

MarketsMuse blog update profiles ETF providers pushing to level the playing field with their mutual fund competitors by pushing to gain more information on clients who invest in ETFs, just like mutual funds already do. A new initiative from the Canadian ETF Association is doing just that. An excerpt from The Globe and Mail’s article, “ETF providers want to know who’s buying” is below explaining more about the initiative.    

Exchange-traded fund providers say they’re at a disadvantage compared to their mutual fund competitors and are aiming to level the playing field with a new lobbying effort to obtain data on the financial advisers who sell ETFs.

The initiative, which is being spearheaded by the Canadian ETF Association (CETFA), will provide ETF companies with information on the financial advisers who are selling exchange-traded funds, and the breakdown on which funds they are selling to their clients. Mutual fund companies already receive such information.

If implemented, it could result in a surge of ETF sales within the Canadian marketplace.

The lack of adviser information has plagued the rapidly growing ETF industry, which competes in a market where investors are heavily invested in mutual funds. Canadians hold more than $1.22-trillion in mutual funds compared to $80-billion in ETFs, as of February, 2015.

Currently, ETF providers may receive a report from an individual investment firm that shows the total number of ETFs held by their clients. But the reports are not sent on a regular basis and do not include information on the individual financial advisers who purchase the funds on behalf of clients.

To read the rest of the article from the Globe and Mail, click here.