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Advisers showing ETF 'disconnect'

Just under a third of financial advisers are regularly recommending exchange traded funds to their clients, says research from BetaShares, indicating opportunity to up-skill.

Speaking to ifa sister title SMSF Adviser ahead of the publication’s upcoming launch, BetaShares head of strategy and marketing Ilan Israelstam said advisers should take greater advantage of the asset class, particularly those that advise self-managed superannuation fund (SMSF) trustees.

“At the moment roughly 30 per cent of advisers are recommending ETFs, there’s sort of a disconnect there,” he said.

“That allows for the forward-thinking adviser or financial planner to skill up [and] learn about ETFs, because one way or another, their clients, particularly those in SMSFs, will buy them.”

Although ETFs have seen constant growth in recent years, the growth cycle in ETFs has accelerated “dramatically” since approximately 2008, said Israelstam. Research indicates the number of ETFs available on the market has more than doubled since 2010, he added.

According to a joint BetaShares and Investment Trends ETF report, 47 per cent or 33,000 of the 96,500 ETF investors in 2012 were purchasing the funds through SMSFs, indicating they are a “major force” in the ETF landscape.