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Cogent: Advisor Usage of ETFs Rose 10% in 2011, Outpacing Other Products

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Usage of exchange-traded funds among advisors increased by 10% during the past year, outpacing usage gains of other investment products, according to a new report.

Cogent Research, Cambridge, Mass., published this finding in a summary of results from a new report, “The Advisor Brandscape: 2012.” The report explores trends, awareness, perception, usage, share of wallet and loyalty to the top mutual fund managers and ETF and variable annuity providers.

The report reveals that 66% of advisors now sell ETFs, up from 60% in in 2010, 55% in 2009 and 46% in 2007. The percent change between 2007 and 2011 is 43%, outpacing the four-year percent change of mutual funds (2%), individual securities (5%), variable annuities (4%), separately managed accounts (15%), and fixed annuities (30%).

Other products that enjoyed significant one- or two-year gains in advisor penetration included mutual funds (97% in 2011 versus 95% in 2010) and separately managed accounts (47% in 2011 versus 43% in 2009.) Variable annuity usage among advisors totaled 81% in 2011, up from 79% in 2010. Reported fixed annuity usage, however, dipped to 39% in 2011 from 40% in 2010.

By channel, the report adds that nearly 8 in 10 (78%) of registered investment advisors and national wirehouse advisors (77%) were selling ETFs in 2011. These percentages are up from 59% and 58%, respectively, in 2007.

The highest users of variable annuities in 2011, the report says, include independent advisors (93%), regional firms (91%) and bank advisors (87%). These percentages are up, respectively, from 90%, 83% and 80% usage levels reported in 2007.

Advisor penetration of fixed annuities in 2011, the report notes, remains highest in the bank channel (75%), followed by independents (46%) and regionals (45%). These percentages compares with 2007 usage levels of 51%, 39% and 27%, respectively.