ETFs

A look at the numbers shows that exchange traded funds are starting to move in lockstep with RIAs and vice-versa. RIAs invested $496 billion in ETFs in the 12-month period ended June 30, 2015 – that’s a $78 billion increase compared to the same period the year before. By comparison, the wirehouse channel added 20% fewer ETF assets, or $397 billion in the last year; granted, an amount that was $70 billion greater than its aggregate investment during the same 12-month period the year before, according to Broadridge Financial Solutions. RIAs that manage portfolios and make discretionary investment choices for their clients value ETFs because they provide advisors with easy access to market segments at a cheap price – an especially important factor for RIAs who are compensated on an asset-fee basis. Fee-based advisors appreciate ETFs’ tax efficiency, liquidity and broad exposure at low cost. Conversely, RIAs are a prized channel for ETF-makers like State Street, Invesco, PowerShares, Vanguard Group and BlackRock. ETFs are also a major ingredient in portfolios devised by robo-advisors -- essentially automated RIAs -- for the mass affluent who invest more than 90% of their assets using ETFs.

Robert Tull: It’s a free service today, but the operative word is today.

How Vanguard, BlackRock and State Street -- which manage RIA trillions of AUM for a pittance -- may artfully make the bill come due by beating active managers at their own game

The ETF giants' latest mutual fund-killing trick is free management of ETF portfolios -- perhaps the seeds of a massive freemium model

June 6, 2018 — 9:42 PM UTC by James Picerno

Brooke's Note: Just when you think it can't get any better for RIAs looking to cut costs, improve quality and scale their businesses without making additional hires, it does. The bad news for RIAs is that investment management is no longer enough to ...

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BlackRock recruited Michael Lane as it continues its quest to dominate the ETF market without chopping fees to nothing.

BlackRock poaches a DFA big to head its efforts to get RIAs to use iShares and connect more to BlackRock itself

The $6T New York manager gets Michael Lane to instill community building, Dimensional Fund Advisors-style, but it won't get him to leave Austin

June 2, 2018 — 2:16 AM UTC by Dina Hampton and Brooke Southall

After 14 years at Dimensional Fund Advisors, Michael Lane is the new head of US Wealth Advisory iShares for BlackRock Inc., though he'll stay in his house.

The hire comes amid the $6 trillion New York-based asset manager's push to hold off a crowded field in an exchange traded ...

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Paul Gamble is selling what academics do as he did at Financial Engines -- and that worked out.

After losing Lee Kranefuss and raising $10M, 55ip gets RIAs to buy Ph.D. smarts, though a critic calls it gussied-up market timing

Guided by an ex-Financial Engines ringer, Paul Gamble, the New York startup is now portfolio modeler for $100 million

April 19, 2018 — 10:38 PM UTC by Oisin Breen

Brooke's Note: Your average RIA is about as excited about having a Ph.D. in mathematics manage client investments as they'd be about a Ph.D. in aeronautical engineering piloting their aircraft. Take DFA as a prime example of that premise: RIAs love how it ...

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Joe Duran: It allows them to be expensive and to expand. They’ll be able to take PAS and more aggressively market it.

Vanguard Group gets under RIAs' skin by launching ETFs supposedly aimed at helping them

Joe Duran says debut of up-priced, factor-based ETFs paves the way for fatter Vanguard RIA margins and broader U.S. wealth-management market share

February 22, 2018 — 3:55 AM UTC by Lisa Shidler

Brooke's Note: Vanguard Group has always enjoyed the best of both worlds as an RIA vendor. It has slain competing managers by winning the most flow on one hand. On the other, its tactics for winning those assets are ethically unimpeachable so marketplace gains lead to ...

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Tim Buckley: With mutual fund fees coming down, the highest fee is the advisory fee itself.

At Inside ETFs, Vanguard CEO skipped over ETFs to get to a hotter topic -- mass delivery of financial advice

In his first public speech, Tim Buckley warned that asset managers no longer have the target on their backs -- but advisors do

January 30, 2018 — 10:13 PM UTC by Graham Thomas

Brooke's Note: It was stunning to see a new Vanguard Group CEO go to an ETF conference and not talk ETFs, despite having the mother lode of inflows product arsenal to crow about. Tim Buckley talked in great detail about financial advisors -- mostly RIAs, mostly ...

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Natalie Zahradnik: RIAs in particular can be early adopters of new products.

PIMCO's institutionalize-Bill-Gross effort culminates after three years in price hikes tempered by ETF migraines and fee cuts

The Newport Beach, Calif.-based manager notably jacks up charge for PIMCO Income Fund after it soars to $92 billion, which slowed its asset flows not at all as it zoomed past $100 billion

December 4, 2017 — 8:31 PM UTC by James Picerno

Brooke's Note: PIMCO has three giant challenges: It sells mutual funds in an ETF era. It sells active management in a passive era. It is known as a bond investor but that may harm its efforts to expand into the green meadows of managing equities. Then ...

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Mark Matson: They've gone from smart beta is stupid to we're the ones that can pull it off. It's hypocritical at best and they're applying it completely wrong.

Wealthfront calls its smart beta approach 'superior' to Dimensional Fund Advisors largely because DFA works with RIAs

The Redwood City-based robo-advisor's CIO Burton Malkiel says his firm's robo-approach to factor investing convinced him to reverse his stand on passive investing as unbeatable

November 17, 2017 — 2:21 AM UTC by Brooke Southall

Brooke's Note: The headline of this article could just as easily be: "Wealthfront goes smart beta by getting its chief investment officer to renounce the basis of his fame and put chimps with darts back in their place." The action in this story happened back ...

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David Mann: We’re leveraging active management expertise at Franklin Templeton and bringing it into the ETF world.

Franklin Templeton's ETF play reveals pain of being late -- yet it beats never

Franklin Resources has hewed to near a $42 share price back to 2006 but with $750 billion of AUM it is being deliberate with launch of single-country ETFs, opening wider window on strategic weaning from mutual fund dependency

November 10, 2017 — 12:29 AM UTC by James Picerno

Brooke's Note: For a company as big, old, proud and well-known as Franklin Templeton, the rationalizations for why ETFs should be ignored are long and diverse. So even after thousands of articles on the topic of ETFs cannibalizing mutual funds, the accelerating capitulation of ...

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David LaValle: ​There are so many factors. Some of them we can be very perceptive about and others are more difficult to estimate.

TD Ameritrade calms the RIA Twitter storm but not questions about the spreads on the ETFs replacing the super-liquid Vanguard and Core iShares

The additional 60-day extension lets advisors breathe but even Wall Street analysts wonder just how far TD Ameritrade should go in inflaming 'consternation' of 'golden goose' RIAs

October 27, 2017 — 12:45 AM UTC by Lisa Shidler

Brooke's Note: I decided for certain RIABiz needed to follow up on the story related to a power struggle between TD Ameritrade and some RIAs with regard to an abrupt change in the ETFs it makes available commission-free. The way TD approached communications around ...

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MIchael Kitces: TD Ameritrade continues to maintain that lots of firms are happy, but I have not heard from one that is pleased with the changes. Literally not one.

TD Ameritrade is 'gathering feedback' after Michael Kitces's blogged overture for RIA collective bargaining on wholesale ETF line-up shift

The blogger and RIA platform owner offered three compromises and one request for a deadline extension but the RIA custodian is thus far having none of it

October 20, 2017 — 11:47 PM UTC by Brooke Southall

Update: TD Ameritrade gave ground today (Monday) on a key aspect of its wholesale ETF line-up change -- when it will go into effect. The broker-dealer sent out an email saying it had extended by 60 days the time that advisors can live on the terms ...

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Justin Castelli: It felt like we were all blindsided.

TD Ameritrade angers RIAs who feel 'blindsided' after TD Ameritrade's actions prompt the departure of all Vanguard and some iShares ETFs from its NTF platform

The Omaha-based broker's roll-out of new ETF platform also removes Morningstar as ETF-picker as new State Street ultra-cheap fund line-up gets the Vanguard/iShares spoils

October 18, 2017 — 9:45 PM UTC by By Lisa Shidler

Brooke's Note: Among cascade of post-DOL changes none are more stark and raw than ones associated with fund platforms. See: US Bancorp venture uses $2.6-trillion running start in bid to become the supermarket-of-fund-supermarkets -- with analysts seeing threat to Pershing and other clearing giants. The good news ...

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Louis Navellier: All Navellier and sub-advised portfolios have GIPS-complaint fact sheets and we have been GIPS-compliant for 20-plus years.

Louis Navellier ready to present 'extremely strong defense' to daunting SEC fraud charges

The Florida-based mutual fund owner says he advertised using GIPS-compliant material such that: 'I didn't sell this at all'

September 19, 2017 — 12:19 AM UTC by James Picerno

Brooke's Note: Louis Navellier is unbowed in the face of withering charges of fraud from the SEC. See: Navellier is latest to catch F-Squared affliction as SEC broadens parameters of wrongdoing. The case may boil down to whether or not a jury buys his ...

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Richard Powers: If [new products] don’t differentiate in product design or exposures, some form of traditional active is how many firms look at ETF’s as 'my only shot.'

Morningstar renders ETF verdict by discontinuing ETF-only conferences after category becomes the Vanguard-BlackRock show

Smaller, newer ETF players are forced to pursue micro-niches and active management -- only to encounter the big players lurking there, too

September 13, 2017 — 5:26 PM UTC by Graham Thomas

Brooke's Note: ETFs have a bright future. Morningstar has a bright future. Neither seems remotely replaceable. But human characters as diverse in nature as Chip Roame, David Booth and Jack Bogle have long cautioned that nobody should count mutual funds out. That Morningstar is now ...

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Alex Bryan: Schwab is on the cusp of making that bridge to the top space in ETFs

Charles Schwab & Co.'s vertical play to monopolize ETF market -- to be its low-cost maker, distributor and manager -- diesels ahead as ETF OneSource grows again

San Francisco giant executes macro strategy to underprice Vanguard, get paid big bucks to sell third-party funds for free, sell ETF portfolios gratis in its industry-leading robo-advisor and keep custody of $1.4T of RIA assets fast-converting to ETFs

July 14, 2017 — 8:51 PM UTC by By Lisa Shidler

Brooke's Note: In an earlier phase of my life I partnered with a friend to start a brew pub and ran into an interesting problem. It turns out it is illegal to be both a big maker of beer and an owner of a ...

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Lukas Smart brought DFA fervor to a surprisingly self-critical smart beta conference.

The smart beta ETF industry gets blasted at swank Manhattan summit by an unlikely group of critics

The active-but-passive category soared from $200 billion to $620 billion in the past four years, but Rob Arnott and other big smart-beta names at Convene were not in a gloating mood

June 15, 2017 — 2:44 AM UTC by Janice Kirkel

Brooke's Note: Whoever the genius was who coined the term "smart beta" was smart, like a politician. In a sense, the whole category starts with the promise that you can get something for nothing. But smart beta ETFs have few critics, perhaps because the ...

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