ETFs Drive Change In Wealth Management, Cut Entry Barriers - Credit Suisse

Tom Burroughes

24 November 2010

The fast-growing world of exchange-traded funds is helping to craft the shape of the wealth management industry, helping small boutique advisors to challenge the once-dominant position of big wire-houses in the US and affecting how advisors serve clients in Europe and elsewhere, according to Credit Suisse.

ETFs, which carry a TER as low as 15 basis points in Europe and even lower in the US market, enable discretionary wealth managers to build portfolios more easily and cheaply than in the past. Additionally, clients using advisory-only businesses can also gain market exposure for lower cost, Dan Draper, Credit Suisse global head of ETFs, told journalists at a briefing seminar yesterday.

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Within Credit Suisse's private banking business, product specialists perform wide due diligence checks in looking at the ETFs available both from Credit Suisse’s own product teams and from outside the bank, Geelan said. In particular, he said advisors scrutinise ETFs for issues such as possible counter-party risks.