ETF usage has been on the rise for years, especially with the recent explosion in offerings of active strategies alongside more traditional passive options. However, usage of ETFs varies widely, according to an analysis of 13F filings from the top 50 independent RIAs conducted by AdvizorPro.
Of the 13 firms with more than $100 billion in total AUM, the percentage allocated to ETFs ranges from a high of 39.1% percent (Creative Planning) to less than 2% (for each of NISA Investment Advisors, Strategic Advisers and Captrust).
“What I’m seeing from the data is that as clientele are coming in and saying where they want assets, ETFs can open things up nicely,” said Hesom Parhizkar, co-founder and CTO of AdvizorPro. “It’s telling looking at how they go about selecting their vehicles.”
All advisors with $100 million or more in assets are required to file 13F forms with the SEC. AdvizorPro scrapes that data to analyze investment patterns. They use that data to produce quarterly reports analyzing trends or determining whether particular ETFs are gaining traction among advisors. The annual look provides a 30,000-foot view of how usage of ETFs varies between some of the biggest shops.
When widening the aperture to all 50 RIAs in AdvizorPro’s list, 11 firms have more than 50% of client assets, led by United Capital Financial Advisors, with 81.11% of assets in ETFs ($13.9 billion out of $17.2 billion in total assets).
In terms of total dollars allocated to ETFs, Creative Planning leads the way ($85.0 billion), followed by Edelman Financial Engines ($46.2 billion), Wealth Enhancement ($35.4 billion), Cetera ($34.4 billion) and Hightower ($32.7 billion).
The findings align with a report published this week from Escalent showing that advisor allocations to ETFs rose to 32.6% of AUM, up from 23.6% in 2023. (In contrast, mutual fund allocations declined to 19.7% from 26.5% in 2023.) Escalent’s report also found that allocations to active ETFs increased from 25% in 2023 to 29% of ETF assets today. And now 80% of advisors are using active ETFs. (Escalent’s data is based on an online survey of 1,550 registered financial advisors.)
“We’re seeing a notable shift in advisor sentiment, with heightened interest in actively managed investments, including U.S. equities, U.S. fixed income and ETFs,” Meredith Lloyd Rice, lead author and vice president in Escalent’s Cogent Syndicated division, said in a statement. “For years, mutual funds have led the way as ETFs slowly gained ground. Now, we’re seeing a sharp acceleration in active ETF allocations as advisors tout low costs, liquidity, transparency and access to a wider range of markets, sectors and strategies.”
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