Who’s leading the charge behind mutual fund and ETF investments? The answer is none other than independent broker-dealers (IBDs).

During the third quarter, IBDs led third-party distribution of funds by accounting for $1.9 trillion in both long-term mutual fund and ETF assets under management, according to Strategic Insight.

While the independent channels continue to drive overall growth, the use of products varies by type of firm. IBDs continue to show a preference for mutual funds, while RIAs utilize funds and ETFs more evenly,” said Frank Polefrone, senior vice president, Access Data, Broadridge.

The IBD channel favored long-term mutual funds with a $241 billion increase, representing 91% of 2013 YTD growth, versus just $24 billion, or 9% for ETFs. By comparison, the RIA channel growth was more balanced with a $99 billion increase in long-term mutual funds YTD, representing 65% of the growth in the RIA channel, versus a $53 billion increase, or 35% for ETFs. Wirehouse firms were similar to IBDs with the majority of the increase coming from long-term funds over ETFs, $115 billion to $36 billion, respectively.

Strategic Insight estimated net flows for these channels and found that, while all channels experienced growth due to market appreciation, the mix of net investor demand between funds and ETFs differed across market segments.

For ETFs, the RIA channel displayed the strongest demand with roughly $30 billion of YTD net inflows to ETFs at the end of the third quarter. U.S. equity strategies were the primary driver behind investor demand for ETFs.

Overall, third party distribution of long-term mutual fund and ETF AUM increased by 23% to $8.3 trillion in the third quarter of 2013, compared to $6.8 trillion in the same period in 2012.