Are darker days ahead for the mutual fund industry?
Mutual funds are expected to suffer declines in the product mix used by financial advisers by more than 10% by 2009, according to a new report.
Advisor Product Forecast, which was released by Cogent Research on Dec. 7, says:
Advisors, armed with better technology and more product options, and tasked by clients to be productive wealth managers, are more readily exploring newer investment vehicles to best meet individual client needs. And within this landscape is a need for advisors to expand their own revenue channels by buying and recommending investment products that serve clients well and can be executed within the growing fee-based environment. While advisor use of specific products varies by channel, the research shows that advisors are often conflicted by the need to select more sophisticated products that match clients’ complex needs, but challenged by their ability to explain these complex products to clients.
Investment products expected to see the most dramatic increase in market share include separately managed accounts (SMAs) and exchange-traded funds (ETFs). No wonder hundreds of ETFs have been launched thus far in 2007.