Exchange-traded fund assets have risen dramatically over the past three years, though the products are not widely known, never mind understood, by retail investors. One of the reasons is that brokers and financial advisers aren't talking to clients about ETFs or really pushing them at all. That was one of the conclusions from a study commissioned by the American Stock Exchange and presented at its ETF conference held in New York last week. The study, conducted by Harris Interactive, bases its results on a survey of 2,337 investors and 200 brokers and financial advisers between August 29 and September 10, 2001.

Although 82% of brokers and advisers said they are very or somewhat familiar with ETFs, only 29% said they frequently or sometimes recommend them to clients, according to the study. For those who said they rarely or never recommend ETFs, the top three reasons were: the value of a broker or adviser is to recommend stocks or actively managed funds (79%); clients have difficulty understanding ETFs (63%); and the brokers and advisers themselves need to know more about ETFs (62%). Furthermore, only 24% of investors who know about ETFs said they were introduced to them by a broker or financial adviser, according to the study. The rest learned about them through the media, from friends, mutual fund mailings, retirement plan managers or investment seminars.

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