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Advisors & ETF Brands: Loyal or Agnostic?

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More than 80% of advisors favor ETF manufacturers with good performance/track records, low expense ratios, good reputations and sector availability, according to an online survey conducted recently by and sponsored by OppenheimerFunds. 

Likewise, 85% of advisors surveyed prefer certain platforms due to their low trading costs, reputations and wide choice of ETF providers. (Vanguard proved most popular among advisors in both categories.)

Yet many advisors interviewed are “fund agnostic,” such as Patrick Sier, president of Advisory Services of New England in Barrington, Rhode Island.

He primarily uses one large discount broker’s platform but has access to others.

“It’s the clients who bear a transaction cost. So to the extent they are looking at one ETF over another, if they want to avoid the cost, I can steer them toward an ETF with no transaction costs,” Sier explains.

“But that’s such a [small] part of the puzzle. All things being equal, I go to the one with the lower transaction cost,” he says.

Other advisors share this opinion.

Charles Scott, president of Pelleton Capital Management in Scottsdale, Arizona, states, “If I want to be in the tech space, [and one firm has a good ETF], then I’ll go and buy it. I don’t care who creates the ETF or platform.”

Most advisors say that if a more expensive product is performing better, even allowing for costs, they will opt for it as the best match for their clients.

Why Advisors Prefer Certain ETF Brands