Advisers turn to ETFs
Advisers have traditionally been the biggest adopters of exchange-traded funds (ETFs) in Australia and they are looking at the new ways to get better outcomes for their clients, according to BlackRock.
The firm said advisers traditionally relied on term deposits and were now starting to think about portfolio construction in new ways to help their clients achieve better results, including new fixed income vehicles.
BlackRock’s head of America iShares fixed income strategy, Matthew Tucker, said ETFs were giving people the language to help them understand what was happening in fixed income markets and often became a barometer of these markets.
BlackRock’s director and head of iShares Australia, Jonathan Howie, said: “And ETFs are very much front and centre in terms of the consideration for those clients”.
Howie said the company had six fixed income exposures in ETFs and that advisers were looking at exposures to build more diversified income portfolio for their clients.
Howie noted that ETFs were also a part of the broader technology designed to better serve clients, in particular self-managed super funds (SMSFs) as the industry generally struggled to serve the SMSF market.
“My personal view is that regulatory changes are really forcing us, larger wealth businesses, to very quickly look for ways to generate more scale in their operations, they need to reduce costs and increase the number of clients they can serve efficiently whether you call it robo-advice or something else technology will be an enormous component of that,” he said.
“We really see ETFs as a technology, as a component of that broader technology-based solution to serve clients, and in particular SMSFs clients.”
AUTHOR
Oksana Patron
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