The second takeaway was on the need for data – what sources and partners to use for that data, how much will that cost, how to use it to focus on intelligent and targeted communications and create an optimized sales experience. The conversation is endless and it is driving distribution decisions and capabilities.

The third takeaway resides around what we call the “Institutionalization of retail”. Said differently, the investment decisions are becoming more concentrated with fewer people. Whether it is wealth management home office personnel approving products for advisor access or model providers selecting investments for inclusion, the decisions that can lead to significant commercial opportunity are largely determined by fewer people than ever before.

Hortz: What are your thoughts on mutual fund conversions and do you see more mutual fund managers converting to ETFs? What are their key decision factors for making that move?
DelSignore: I think conversions are going to continue to change the landscape as they create a path for asset managers to enter the ETF industry with their existing strategies and assets. One point of consideration is how the wealth management platforms will handle these products as conversions accelerate. Those asset managers considering conversion as an option should consider the following:

Platform access- ETF issuers should look to engage the wealth management platforms in advance to understand the considerations of placement where their mutual fund may have been available. The same may not be the case for the ETF.

Distribution plan – for some asset managers, the conversion marks their first entrance into the ETF industry. Understanding how the firm will handle distribution of the ETF is a critical consideration. Will you hire ETF specialists to support the product?  Do you plan to add the ETF to your current sales teams’ responsibilities? These decisions should be considered well in advance of any launch.

Hortz: From your perspective, where do see the ETF industry evolving over the next decade?
DelSignore: I feel like we are in about the 3rd or 4th inning for the ETF industry. I think a few key areas will continue to fuel growth:

Active ETFs – We have yet to see the true impact that the entrance of some of the largest asset managers will have on the development and usage of ETFs. This captures both new launches and conversions, as well as transparent and semi-transparent ETFs.

Model portfolios – this is a twofold opportunity. Wealth Management platforms and firms can create model portfolios for their advisors to offer outsourced investment solutions and take the time-intensive portfolio management decisions out of their hands. Model portfolios also provide a strong commercialization strategy for the ETF issuers.

Evolution of users – meaning, we are constantly learning about how investors are using ETFs in their portfolios. I think that the evolution in an asset class like fixed income, where meaningful white space for product development still exists, we will see unique applications particularly in the institutional market.

Expansion globally - The US is the most mature market, but you are seeing strong growth all over the world as ETFs grab hold in both the institutional and retail markets.