Standard & Poor’s (S&P) will fund education for financial planners on fixed-income exchange-traded funds (ETF) in order to increase and improve knowledge about the new products.
Fixed-income ETFs were released to the Australian market last week, with Russell Investments and iShares being the first to offer the asset class, while BetaShares launched its cash ETF.
“We will accrue a budget for an education commitment going forward, year on year, from now on, which we didn’t [have] a few years ago but we do now,” S&P Australia head of indices Guy Maguire told InvestorDaily.
“One of the triggers that will kick off the investment into fixed-income ETF products by self-managed superannuation trustees and the advisory channels is education.
“Our education will focus on ensuring the investor understands the underlying index so that it isn’t mystifying.”
The education would also comprise the characteristics of bonds in general and would be delivered through webinars, collateral on its website, dedicated websites, education at industry events and undertaking intimate adviser-based events.
“The trouble is there’s a huge adviser base out there and it may be better initially preaching to those that are already somewhat converted to ETFs and those also thinking about fixed income as an asset class,” Maguire said.
“As an index provider, this challenge is there for us.
“In a practical context, in order to support our indices we set up channels for certain markets so the adviser market is a dedicated channel.”
S&P is looking carefully at its communications strategy, such as using the correct language in educational documents.
“We can’t go [sending] out institutional-grade language and expect that to be easily digestible at the adviser level, let alone at the level of a mum and dad,” Maguire said.
“From an adviser point of view, that’s what we really have to step up on now.”
