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Schwab Seeks to Lead in ETF Education

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Charles Schwab office. (Photo: AP)The Charles Schwab Corp. announced its game-changing commission-free ETF platform to much fanfare on Thursday, but less heralded has been a new ETF education resource launched in the fourth quarter that could help advisors use these ETFs.

Speaking with AdvisorOne ahead of IndexUniverse’s InsideETFs Conference, Schwab’s head of third-party ETF platform management Beth Flynn says the Schwab ETF Education Exchange is a cross-industry collaborative effort.

“Together with 30 other industry participants, we present educational materials on ETFs for all of our clients,” Flynn says. Morningstar, Guggenheim, SPDR University and BlackRock are among the content providers contributing to the site.

“It’s way more than Schwab could do on its own,” Flynn says.

The site, launched in November, contains whitepapers, tutorials, videos, commentaries, links to webcasts and live education sessions, Flynn says, adding “there’s no product sales push; it’s purely educational.”

Notably, there are three versions of the site, including a dedicated channel for financial professionals.

“There you’ll have access to our ETF platform and recommendations for clients—everything from ETFs 101 to sophisticated hedging and overlay strategies,” Flynn says.

A recent study commissioned by Schwab found that 45% of investors consider themselves novices when it comes to understanding ETFs, so the new site may aid investors and advisors meet this knowledge deficit.

Other advisor education initiatives Schwab has backed include a quarterly webcast on topics such as trading, best practices or sectors such as commodities. “We typically invite third party experts to join us for the sessions,” Flynn says.

Schwab also produces a quarterly newsletter called “Expert Voice on ETFs” and offers advisors various screening and research tools on the Web, she adds.

The role of advisors in ETFs has grown in prominence, Flynn says. That is because individual investors have dominated ETF investing in recent years, but that has changed according to the firm’s most recent study of retail investors.

“Advisors have now taken back the lion’s share of [ETF asset] flows,” she says.

As for the much ballyhooed new commission-free ETF platform, Flynn says that advisors particularly will be pleased by the breadth of offerings spanning all the major investment categories as well as the lack of restrictions on how advisors trade ETFs. For example, there will be no short-term redemption fees.

What’s more, Flynn says advisors can expect that more ETFs from both Schwab and other providers will be added to the platform.

“On the Schwab side, there is a healthy pipeline of product development,” Flynn says.


Check out AdvisorOne’s InsideETFs 2013 enhanced landing page for complete conference coverage.