Kevin O’Leary may be the face the ETF industry needs.
O’Leary, chairman of O’Shares ETFs, told the 2,250 attendees of the 2017 Inside ETFs conference in Hollywood, Fla. that his plans for the ETF business go beyond his firm’s lineup of six ETFs—they even go beyond the dozen-plus funds in the O’Shares pipeline.
“Fund flows into this asset class are No. 1 on earth, but I still think we’re in the second inning,” O’Leary said on Tuesday. “Most of the people outside this room have no idea what an ETF is. We, as an industry, have a fair amount of work ahead of ourselves to educate people. The average investor is a neophyte to this asset class.”
A relentless promotion machine and reality star nicknamed “Mr. Wonderful,” O’Leary is a household name to many Americans for his role in the CNBC venture capital television series “Shark Tank” and the Canadian “Dragon’s Den,” only recently making forays into the ETF industry.
While O’Leary believes many advisors, to this day, poorly understand ETFs and their benefits, he said he is focusing on younger investors in particular. Millennials have been slow to invest in general—for many, educational debt has hampered their saving efforts, and many also regard the financial industry with suspicion.
O’Leary described a recent talk to a group of millennials—when he asked how many were invested, only two out of 100 raised their hands.
“They didn’t know any of our brands, they’d never heard of any of you,” O’Leary said. “We’ve got a fair amount of work ahead of us to somehow capture this generation ... the potential for the industry is to somehow get spokespeople like me and others to talk about investing.”
Some of the work capturing the millennial audience will come through innovation—and O’Leary, whose own wealth was generated through entrepreneurship, plans to add inspiration to the cause.
Millennials, when they do start to invest, will likely do it different from the rest of us. Instead of calling a broker to make a trade, or buying funds through a website on their computer, O’Leary believes that millennials will find their way to ETF investing incrementally via their cellular phones.
“This is the same analogy as emerging countries skipping landlines completely and going to cell phones,” O’Leary said. “We’re developing an application that will enable you to invest $20 at a time into fractional stocks.”