Inside ETFs , IndexUniverse’s annual ETF conference, began today with speakers focusing on ETF trends that included changes in indexing, more free ETFs and the prospect of ETFs to 401(k) programs.
One of the country's leading advisors, Ric Edelman, kicked off the three-day event this morning with a practice management seminar on how he built his business to $8.5 billion in assets under management.
Edelman, the No. 1 Barron's ranked advisor, started the conference with a three-hour practice management seminar that focused on the principles and philosophy behind his 330-employee, 18,000-client business.
“We take the clients no one wants,” Edelman said, referring to his $5,000 client minimum. “Wall Street loves to make money for people who already have money. I want to make money for people who don’t have any.”
Edelman’s talk included “The Evolution of a Financial Advisor” as well as the four fundamentals for running a successful advisory practices, which include:clients must be homogenous; advice must be strategic; advisors must be consistent; and a successful advisor's operation must be scalable.
He also extolled the benefits of being an independent advisor.
“Instead of giving your [client] book to your employer when you retire, an independent advisor can sell that book for millions of dollars.”
The Sunday session also included workshops on ETF fundamentals and risks, advanced ETFs, understanding fixed income and understanding commodities.
Jim Wiandt, CEO and founder of IndexUniverse, outlined the ETF trends he sees developing.
“Of course the big trend for ETFs is growth in AUM,” he said, adding that ETF-issuer trends include self-indexing, self-indexing, fundamental indexing, more free ETFs, as well as facing potential a pay-to-play on free ETF platforms.
Artience Capital's Kim Nordmo said she expects to see ETFs coming to 401(k) plans. “There are 72 million investors that don’t have ETFs available” to their retirement programs. Nordmo said she expects more 401(k) administrators to realize the fiduciary responsibility they have to offer those to participants.
The growth of actively managed ETFs was also identified repeatedly throughout the day, but State Street Corp. Vice President and Senior Counsel Ryan Louvar described the day that the Securities ' Exchange Commission approves nontransparent ETFs as a “long ways off.”
The conference will include various speakers, including Grant’s Interest Rate Observer’s Jim Grant, a critic of the Federal Reserve and proponent of a return to the gold standard, former Vanguard Chairman And CEO Jack Brennan and Dennis Gartman, publisher of The Gartman Letter, among others. The three-day conference includes various panels, a live ETF trading workshop and keynote speeches that will touch on macroeconomic issues, the state of the industry and the future of China, among other things.
Inside ETFs, considered by many to be the “see-and-be-seen” ETF industry event of the year, takes place at a time when the ETF industry is in full bloom, boasting a record $1.4 trillion in U.S.-listed assets spread over some 1,400 funds. It is being held at the Westin Diplomat, in Hollywood, Fla., Sunday through Tuesday.
New product rollouts slowed in the past year and fund closures accelerated—two related trends suggesting the industry is now exhibiting a sustainable long-term growth pattern.
One trend that bears close watching is the inflows into equity ETFs that have been accompanied by outflows from equity mutual funds —a zero-sum game many say may one day spread to the world of bond investing as well.
As a point of reference, nearly three-quarters of all the money now invested in U.S.-listed ETFs is in equities, with a bit more than half of that figure focused on U.S. equities. Conversely, less than 20 percent of current ETF assets are invested in fixed-income strategies.
Work And Play
Other stars of the business world—if not the ETF world—attending include Twitter founder Biz Stone, who will deliver a keynote luncheon address on Monday, and New York Yankees General Manager Brian Cashman , who will deliver one on Tuesday, the last day of the three-day meeting.
The conference also comes as the first U.S. exchange-traded fund, the SPDR S'P 500 ETF (SPY), had its 20 th anniversary in January.
The fund’s sponsor, State Street Global Advisors, is celebrating the occasion at the IndexUniverse conference, hosting a party on Monday evening that’s scheduled to go on until the wee hours of Tuesday morning.
CNBC, which begins its coverage Monday, is the exclusive broadcast partner of the 6th annual “Inside ETFs” conference. Be sure to also catch On-Air Stocks Editor Bob Pisani on Twitter (@BobPisani).
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- Ric Edelman