Since starting her new job at ETF Securities at the end of last month, Liz Wright has already announced ambitious plans to make exchange-traded products as popular to retail investors in the UK as they are in the US.
The Californian-born professional, who previously worked for Barclays Wealth and Investment Management and UBS Wealth Management, has 10 years of experience educating financial advisers on how to streamline their processes and use open architecture platforms. Now, however, she has moved into the territory of ETPs, after being announced as the UK IFA sales director for ETF Securities.
This is the first time the London-based investment firm has appointed an IFA sales director and, according to ETF securities, its new appointment is representative of a growing appetite in the UK for ETP products. Although the provider explained that such a move had been on the cards for several years, the implementation of RDR was the driving force behind this increased focus on raising awareness with advisers.
Ms Wright said: “I think before RDR came into place IFAs were keen on mutual funds and investing in basic equities. However things have changed and they now have the opportunity and the appetite to research other opportunities. In response to this we are looking to really expand ETFs and exchange-traded commodities in the IFA community and have found that there is a high appetite for them, but they are still misunderstood.”
At this early stage in her new role, Ms Wright and her colleagues plan to align ETF Securities’ ETPs with key platforms. The goal is to make these products widely available, while raising awareness and educating advisers on their benefits and capabilities.
ETPs have grown massively in popularity in the past decade but there is still confusion from many quarters on their exact function. To combat this ETF Securities has launched its online ETPedia education tool, and plans to follow this up with a number of other strategies based on raising the profile of its products.
Ms Wright said: “In the UK, ETPs have seen more use by institutional investors and are often considered here as such. Most IFAs think they are for institutional investors and, at the moment, in Europe only 20 per cent of the ETP market is retail. In America, however, about 50 per cent of ETP investors are retail and 50 per cent institutional and we hope to reach that same level of success here.”
The ETP market has grown considerably in Europe since its launch on the continent 10 years ago and, with the right education and increased accessibility, Ms Wright is confident that it can continue to advance and challenge the popularity of mutual funds.
She said: “A key problem is accessibility. ETPs are accessible but we need to make all suitable products for retail investors available on platforms. Through wrap platforms we can make sure it is as easy as possible for IFAs to invest in them and platforms have been keen to work with us.”
Ms Wright is convinced that in a post-RDR climate, where transparency and low costs are increasingly important, ETPs can fill the gap and provide a worthy solution to the costly alternative of investing in actively managed equity funds. Among the five main qualities, she pointed out that ETPs offered hedging, transparency, exposure across all sectors, liquidity and access to emerging market growth.
She said: “They offer cheaper fees, more diversification to the portfolio and direct exposure. Plus, when you look at mutual funds compared to ETPs, you are looking at trading once a day compared to always being on the stock market. On average there is a 20 to 30 basis point difference on the overall fees.”
In terms of diversification and access to emerging market growth, Ms Wright is unfazed by recent negative sentiment on certain asset classes. Commodities, which makes up the bulk of the provider’s available products, have plummeted in recent months after the fall in gold prices and the slowdown of growth in China.
When asked whether some advisers might be put off by commodity exposure, Ms Wright was quick to dismiss this and explained that commodities formed a crucial part of any successful investment portfolio.
She said: “Commodities will always be of use. They are part of our everyday life and I don’t think they are seen as risky at all. It’s all about increasing understanding of the benefits, which is what we have been trying to push and the response has been positive.”
Although still too early in her tenure to be mapping out detailed plans, Ms Wright is aware that this new position comes with great responsibility and is determined to make ETPs a central part of the modern-day financial adviser’s proposition.
After finishing a busy first week that included meeting and greeting new colleagues and getting settled in, she said the icing on the cake was watching her new company pick up a prize at the Institute of Financial Planning conference.
Ms Wright added: “Within days of joining I went to the IFP conference where we won the most innovative stand award. That just goes to show our commitment and I am really delighted to be working here.”
Daniel Liberto is features writer for Financial Adviser
Career ladder
October 2013 – ETF Securities, director of UK IFA distribution
January 2010 – Barclays Wealth and Investment Management, vice-president, strategic distribution manager; Barclays Wealth Intermediaries, business development manager, assistant vice-president
November 2004 – July 2009 UBS Wealth Management, external asset manager, associate director, business integration specialist
1998 – 2002 Mount Saint Mary’s College (Los Angeles, California) bachelor’s degree in psychology
