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Sea-change of the RDR will open up the market

Product providers are confident that the retail distribution review will lead to a significant increase in advisers using ETFs.

Round table panellist Barclays Global Investors global head of ETF research and implementation strategy Deborah Fuhr said the opportunities presented by the RDR are huge. She said: “We are moving in the right direction but from a relatively small base if you compare it with the US market where, in the fee-based environment, the use of ETFs is very significant. If we use the US as a model, this is a sea-change in the way I think ETFs will be embraced across the UK.”

Seven Investment Management director Justin Urquhart Stewart said the penetration of ETFs has been like “pulling teeth”. He said: “Think how long ETFs have been around for and yet the understanding of them here both through the investment community and private investors is pitifully low compared with what you have seen in the States.”

Db x-trackers UK head Manooj Mistry said there were positive signs emerging. He said: “People like Transact, Novia and Ascentric are embracing ETFs and putting them on their platforms so IFAs can start to use them. By the time the RDR has been implemented, you will see that the infrastructure will be there.”

Skerritt Consultants investment director Andy Merricks said the talk from ETF providers reminded him of the AITC’s failed IT campaign about the use of investment trusts but he said: “That is where the RDR is going to completely open it up and what the investment trust world did not get.”

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