Speaking to InvestorDaily, SSgA director for ETFs Amanda Skelly said the process of adding ETFs to APLs is almost exclusively 'bottom up' – that is, driven by planner demand.
As a result, it is up to financial planners – typically those with large high-net-wealth and SMSF investor bases – to convince their dealer groups to expand their APLs to include ETFs, Ms Skelly said.
Ms Skelly cited Investment Trends data that half of the flows into ETFs are coming from bank-aligned advisers – something that she said was "quite a revelation".
"Bank-aligned tend to prefer managed funds, which sit in with their system, their due diligence and their governance," Ms Skelly said.
But the tide could well be turning, she said.
"I’ve been talking to a lot of the research groups within the dealer groups, and they’re adding ETFs to their APLs," Ms Skelly said.
Encouragingly, the dealer groups that are taking up ETFs are being "quite thoughtful" about how they roll it out, she said.
"They’ve got a lot of ETF accreditation programs in place for their planners so that they really understand them," Ms Skelly said.
"From the top down, dealer groups are starting to take a closer look at the role of ETFs in their business and how they can effectively integrate them with the other products they offer," she said.
In addition to inclusion on APLs, the three main external researchers – Zenith, Lonsec and Morningstar – have been expanding their coverage of ETFs in recent years, Ms Skelly said.
"ETFs are not a managed fund and they’re not a listed security. There has been a real evolution in how [the researchers are] looking at them and how they’re rating them," she said.
