RIAs to Boost ETF Use, Study Says

A study published by Invesco IVZ, parent company of PowerShares, the fourth-largest U.S. ETF issuer, and Cogent Research indicates registered investment advisors (RIAs) are looking to increase their use of ETFs in client portfolios, but plenty of RIAs still need to be educated on the advantages of using ETFs. RIAs indicate ETFs will represent 22 percent of client portfolios, on average, over the next year and 30 percent of client portfolios by 2014, a significant 36 percent increase, according to the study. "Our research shows that our industry has a long way to go to educate RIAs on the pros and cons of ETFs, in general, and on which specific ETFs are best at meeting client needs," Invesco Managing Director Andrew Scherer said. "Thirty-nine percent of RIAs say they don't have an above average understanding of ETFs and 53 percent say don't have a high knowledge level of existing ETF products," reflecting the ongoing proliferation of new ETF options. The study is based on a survey of 206 RIAs with an average of $488 million in investable assets.