Targeted Musings on Financial Marketing

Communicating with Financial Advisors: A Crash Course for ETF Issuers

08 Apr 2019

When it comes to marketing ETFs, there are essentially three possible “verticals” or target audiences: institutional, financial advisors (FAs), and retail. Although each of these buckets is important in its own right, the importance of financial advisors to an ETF’s success can hardly be overstated. FAs are the gate keepers. They are the trusted experts who retail investors turn to when making important investment decisions. Their opinion on an ETF can make or break a potential investment. But how should ETF issuers communicate with this coveted demographic?

Be sure to check out our Guide for How to Communicate with Institutional Investors here.


Investor Education

Investor education, which can take the form of one-pagers, infographics, brochures, pamphlets, a series of short blog articles, or even animated videos, is absolutely critical to communicating with FAs, and it’s easy to see why. If an FA hasn’t heard of a product or doesn’t properly understand how it works, they can’t recommend it as an option to any of their retail clients; nor can they properly articulate any of its selling points or drawbacks.


Striking the Right Tone

Just as with retail investors, there is a vast range of sophistication within the FA community. Some FAs are extremely plugged into the financial markets, have extensive knowledge of ETF arcana, and can talk the talk with the best about smart beta, ESG, and the inner workings of the ETF ecosystem. On the other hand, some FAs may come from more of a mutual fund background and don’t have as firm of a grasp on the basics of ETFs. What’s more, some FAs are surprisingly mis- or underinformed about such basic topics as asset allocations, the difference between an active and passive ETF, and the fundamentals of the primary and secondary market.

This wide range in sophistication necessitates a light touch when it comes to communicating with FAs. Be sure not to “talk down” to FAs in tone. Rather, be sure to define your terms, but only as if you were reviewing material FAs are already familiar with. The tone can be somewhat sophisticated, but keep in mind that oftentimes FAs will pass on materials to their retail clients for them to look over, so investor education materials produced for FA consumption often needs to do double duty as retail investor-friendly materials as well.


Tackling the Right Subjects

What should FA-facing investor education content be about? The only limit is your own creativity! You could make high level ETF material that dives into the mechanics of the ETF structure, which can often be very helpful for FAs looking to educate their clients on ETFs (and maybe even brush up on the ins-and-outs of ETFs themselves), or you can produce product category or even ticker-specific investor education materials, such as in-depth primers, investment cases, or even animated videos.


The Bottom Line

By striking the right tone and tackling the right topics, you’ll be well on your way to effectively communicating with FAs, a critical demographic in ETF issuers’ quest to grow AUM and boost investor interest.