Financial advisors have, in general, been slow to adopt ETFs. Some of them are creatures of habit, and continue to utilize primarily mutual funds. Most of them, quite honestly, have been hesitant to make the switch to ETFs due to concerns about their compensation; the lack of 12b-1 fees in ETFs eliminates a once lucrative source of income for brokers and other financial professionals.
But there are signs of progress; usage of ETFs among professional money managers is definitely on the rise, which is a very encouraging development for individual investors. And there are, of course, some advisors who have been pioneers in this regard, embracing ETFs long before their colleagues. For individuals looking to identify a financial advisor who has made the plunge into ETFs and who fully comprehends the tremendous advantages of these vehicles, we highlight a number of financial advisors who have been ahead of the curve on this trend, and who know the ins and outs of exchange-traded products.
[If your asset management firm is ETF-friendly, drop us a line and let us know a bit about your strategy; we'd be happy to add you to the list]
Rick Ferri, Portfolio Solutions
Rick Ferri is one of the strongest and most vocal proponents of index funds, offering a refreshing perspective on the fees that the money management business can justify and the level of performance that can be expected. As founder and member of Portfolio Solutions’ investment committee, Rick has built countless portfolios using index funds and ETFs over the past 20 years. The Portfolio Solutions Web site sums up the firm’s vision and strategy nicely with a simple but powerful equation:
Low Fees + Index Funds = Greater Wealth, Higher Returns, More Confidence.
Rick literally wrote the book on ETFs, publishing The ETF Book, Protecting Your Wealth In Good Times and Bad, All About Index Funds, and The Power of Passive Investing (among others). He also writes a column for Forbes, and provides insights on markets and the money management industry (along with other topics) on his blog at RickFerri.com.
Location: Troy, MI
Matt McCall, Penn Financial Group
Matt McCall, founder and president of Penn Financial Group, is another big proponent of ETFs as building blocks of client portfolios. Utilizing a proprietary top-down research model that focuses on mega-trends, Penn utilizes ETFs to accomplish a wide range of objectives for a wide range of investors–from individuals to institutions.
Matt also offers the ETF Bulletin, a publication that includes actionable ideas and access to ETF watch lists and portfolios.
Location: New York, NY
Tom Lydon, Global Trend
Most ETF investors know Tom Lydon as the editor and publisher of ETFTrends.com, a popular ETF blog that highlights the latest developments in the industry and provides actionable investment ideas. But Tom is also the CEO of Global Trends Investments, a California-based firm that was one of the early adopters of ETFs as foundations of investor portfolios. Since as far back as 2001, Tom has been using primarily ETFs to help investors accomplish their objectives.
Global Trends utilizes a trend following strategy in its portfolio management practice, taking advantage of uptrends using ETFs while also seeking to limit downside losses in bear markets.
Location: Irvine, CA
Gary Gordon, Pacific Park Financial
Lots of investors are quite familiar with Gary Gordon already, between his ETF Expert site, articles on Seeking Alpha, and even the ETF Expert podcast. Gary is also the president of Pacific Park Financial, a Registered Investment Adviser in California, and has been managing money and risk for more than two decades.
Lowering investment costs is one of the principles behind Pacific Park’s mission, so it should be no surprise that Gary is a major proponent (and active user) of ETFs. Gary has some interesting views on the four possible outcomes of investing, as well as tactics for managing downside risk.
Location: Aliso Viejo, CA
Roger Nusbaum, Your Source Financial
Roger Nusbaum is better known in the financial blogosphere as “Random Roger,” a reference to the popular blog where he shares his thoughts on navigating the financial markets, volunteer firefighting, and everything in between (though those activities are, in many ways, quite similar). He also happens to be the Portfolio manager and Chief Investment Officer at Your Source Financial, and in that capacity he manages a range of client portfolios.
Your Source is a fee-based adviser, meaning that the investment team there is not compensated for products they sell to their clients. Fee-based advisers have become big users of ETFs in recent years, since the lack of a 12b-1 fee associated with traditional mutual funds isn’t a deterrent.
Roger uses a mix of individual stocks and ETFs in client portfolios, and could soon become even more directly involved in the ETF industry; AdvisorShares has recently filed details on a proposed Global Alpha & Beta ETF (RRGR) that Mr. Nusbaum would manage.
Location: Phoenix, AZ
Casey Smith, Wiser Wealth Management
Casey is the president of Wiser Wealth Management, a fiduciary, fee-only investment advisory firm located in Marietta, Georgia. Casey’s investment strategy is built around maintaining a diversified portfolio, investing for the long-term, and keeping costs low. Recognizing the poor track record of active managers at beating their benchmark, Casey and his team have embraced ETFs as tools for minimizing fees.
Casey has appeared at a number of ETF conferences, ranging from events in Florida to China.
Location: Marietta, GAContact: 678-905-4450
David Armstrong, Monument Wealth Management
David is the Managing Director and co-founder of Monument Wealth Management, an asset management firm based in the Washington, D.C. area. David manages Monument’s “Global Macro Opportunities” strategy, which was devised in the early 2000s to manage ETFs based on global macroeconomic analysis. David is on the record as being “a huge fan of exchange-traded funds,” noting that he’s managed portfolios comprised entirely of ETFs for close to a decade.
David also writes a regular column for U.S. News & World Report, “The Smarter Investor.”
Location: Alexandria, VAContact: 703-504-9600
Kim Arthur, Main Management, LLC
Kim is a founding partner at Main Management, and now serves as the CEO and portfolio manager for the company. Main has been a pioneer in managing ETF portfolios, grasping early on the potential advantages to using passive investment vehicles to implement active portfolio management strategies.Main has evolved from a single domestic sector rotation strategy to include multiple approaches to investing–but has continued to use primarily low cost, tax efficient ETFs [see more on Kim's approach to ETF investing here].Location: San Francisco, CAContact: 415-217-5801
Jim Clark, Worth Financial Group
Jim Clark is the president of Worth Financial Group, a financial advisory firm in the Dallas area that uses ETFs at the core of many client portfolios. Worth promotes itself as a group that “thinks differently” about the investment process, and their reliance on ETFs certainly differentiates them from many other financial advisors.Worth’s strategy is focused on exploiting investment opportunities in various asset classes through ETFs. Emphasizing a “Grow and Protect” approach over a “Buy and Hold” strategy, and the firm has recognized the tremendous advantages of ETFs over other investment vehicles.
Location: Dallas, TX
Don Dion, Dion Money Management
Don Dion is another highly visible financial professional; he’s written columns for TheStreet.com and authored The Ultimate Guide To ETFs. A lawyer by training, Don took an interesting (but perhaps not surprising) path towards money management: he started managing his family’s accounts because he couldn’t get comfortable with the traditional Wall Street model. Don uses various vehicles in his practice–including mutual funds–but maintains ETF portfolio management services as well.
Location: Williamstown, MA
Christian Wagner, Longview Capital Management
Christian Wagner is the CEO and CIO of Longview Capital Management, an investment management firm based in Wilmington, Delaware. Longview’s investment strategy is driven by relative strength, and allows for allocation across multiple asset classes, sectors, and styles. The firm also places an emphasis on downside management.
ETFs are at the core of Longview’s investment strategy. Longview Funds also maintains a Global Allocation Fund that utilizes primarily ETFs to achieve its objectives.
Location: Wilmington, DE
David Kreinces, ETF Portfolio Management
David Kreinces is the Founder and Portfolio Manager of ETF Portfolio Management(ETF PM), a revolutionary financial advisory firm that specializes in active and passive ETF strategies. The firm is first nationwide to offer strategic passive portfolios with no advisory fee through www.InvestableBenchmarks.com. Additionally, the firm is among the first to highlight a fund of funds solution that combines indexing and trend following.
Location: Newbury Park, CA
The ETF Store is a fee-based, independent registered investment advisor providing clients with low cost, diversified portfolios comprised primarily of exchange traded funds (ETFs). Recognizing that ETFs are more effective tools for accomplishing investment objectives than mutual funds, the team of advisors at the ETF store builds client portfolios using primarily exchange-traded funds.
The team at the ETF Store also puts on a weekly, hour-long radio show on ESPN 1510 AM in Kansas City. The ETF Store Show is dedicated to all things ETFs, including highlighting big movers and educating investors on the benefits and nuances of ETFs.
Location: Kansas City, MO
Yaron Sadan, Osher Capital, LLC
Yaron is the founder and president of Osher Capital, LLC, a value-oriented investment advisor located in New York City that uses ETFs at the core of many client portfolios. Yaron and his team employ a contrarian approach to investing, by looking to invest when others are selling. Osher’s strategy focuses on taking advantage of extreme opportunities that periodically surface through the use of low-cost, efficient, and highly liquid ETFs.
Yaron also publishes The Hard Trade, a subscription newsletter for investors and advisors, that focuses on global macroeconomic investing themes and opportunities.
Location: New York, NY
Kirk Kinder, Picket Fence Financial
Kirk Kinder is the founder and president of Picket Fence Financial, a fee-only planning firm that is dedicated to “Saving Folks from Wall Street”. Kirk and his team focuses on building broadly diversified portfolios with ETFs to keep clients’ costs and tax consequences low. Additionally, Kirk has co-authored the book “Exchange Traded Funds” and blogs about ETFs and other financial topics at Swim Upstream To Wealth.
Location: Bel Air, MD and Clearwater, Florida
Did we miss someone? Drop us a line and let us know if your firm is ETF-friendly; if your story checks out, we’d be happy to include you in our database.
Disclosure: No positions at time of writing.