Financial Services Ireland

ETF operating models: the four most valuable areas of potential improvement

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Faced with increasing competition, promoters need an operating model that’s fit for the future.

ETF promoters are facing a real challenge: How to reconcile fee and margin pressure with fast-changing demands for new products, different services and better reporting. Recently, EY research found that 80% of promoters expect ETF management fees to decline over the coming three years, with nearly a quarter anticipating a fall of 5 basis points or more. Clearly, it’s time for the industry to take a long hard look at ETF operating models and find ways to increase cost efficiency and investor value for money. Even operating models that have delivered success to date may not be future-proof.

As ETFs grow in complexity, there are ever-growing opportunities for asset servicers able to provide tailored support to ETF issuers – Lisa Kealy, Wealth & Asset Management Leader

Use the link below to download our latest article and learn about the four most valuable areas of potential improvement in ETF operating models, as identified by our ETF team at EY Financial Services:

  • Automation and rationalisation
  • Outsourcing and third parties
  • Partnering
  • Talent and “workforce of the future”

We believe streamlined operating models will be crucial to the success of every ETF firm over the coming five to ten years. Few firms are as efficient as they could be and even operating models that have delivered success to date may not get firms where they need to go. It is critical that ETF operating models are ready for future disruption, change innovation and partnering. ETF firms should invest in technology and efficiency now to ensure they are well positioned for a ‘winner-takes-all’ future. If you have a question, or would like help to develop your future ETF operating model, don’t hesitate to get in touch.

Lisa Kealy

Financial Services Markets Leader
Lisa's Full Profile