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A Work-From-Home Shift in the ETF Industry

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In an astonishingly short time starting in March, vast segments of the U.S. economy shifted from working in offices to working remotely.

A  study by Direxion, which provides leveraged and thematic ETFs, and ETF Trends, a source of industry coverage, explored various aspects of working remotely during the pandemic and how the new work environment has affected financial advisors and the ETF industry.

The survey also provided a better understanding of the long-term effects of this secular shift on the advisor market.

The survey was conducted Sept. 25 through Oct. 28 among 2,169 respondents, the majority describing themselves as either asset gatherers or portfolio managers; 55% said their client portfolios are 1% to 40% ETFs; and another 35% said that they use ETFs for more than 40% of their client assets.

Although most advisors did not work remotely before the coronavirus outbreak in the U.S., 83% of survey participants said they would like to work at least one day a week from home permanently. Forty-three percent would like to work at least three days a week from home permanently.

Sixty-four percent of advisors reported that their relationships with clients had not changed after they started working from home, and 18% said their client relationships had strengthened.

Advisors have been talking to their clients more, the survey found. Seventy percent reported increasing their use of video, and 60% said they simply picked up the phone to stay in touch.

Related: COVID-19′s Impact on the Advisor-Client Relationship

Some three-quarters of those surveyed said their work-from-home productivity was good or excellent.

In their work, 52% of surveyed advisors said they trusted industry websites as their primary source for ETF research. Eighty-five percent reported that they had attended a virtual event, and 45% said they had increased their reliance on webcasts.

“With the majority of the industry working from home, these findings are vital to the reopening, management and marketing strategies for firms moving into the new year,” Dave Nadig, ETF Trends chief investment officer and director of research, said in a statement.

“The pandemic has accelerated already existing trends in the advisor business and it shows, with 45% of advisors stating they’ve increased their usage of ETF issuer webcasts. Without any major changes on the horizon, we anticipate the ETF and advisor markets to continue their migration to digital distribution over the next year.”

Direxion President Rob Nestor recalled that the trend prompted his business to build new products to take advantage of the shift. Direxion rolled out the Work From Home ETF earlier this year.

“We were curious to see how it was affecting the advisory business as well,” Nestor said. “The results from the survey clearly show that advisors are being incredibly effective in this changed environment, and leaning in to the tools and resources that help them do their job without going to the office.”

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