Cogent found that the average age of all ETF owners across nearly a dozen providers is not at all uniform. In fact, the range in average age by provider spans more than 20 years, from 31.5 years for First Trust customers to 53.8 for iShares owners. The average amount of a client's investable assets also varies considerably across providers, ranging from a low of $576,000 among First Trust users to $1.1 million for iShares customers.
¡°At present, there is an obvious advantage for established ETF providers that have a greater proportion of customers who are older, and therefore wealthier,¡± said Julia Johnston-Ketterer, author of the report and senior director at Market Strategies. ¡°But looking to the future, companies who do the best job connecting with younger investors who embrace ETFs are the firms that will likely to see the most growth.¡±
Among the 11 ETF providers evaluated by Cogent Reports, First Trust is one of only three firms that are perceived by investors to be firms that ¡°offer products that align with my needs.¡± This perception was even more pronounced among Millennials and Gen Xers. An example of how interest in ETFs and certain providers among younger investors will impact the industry is reflected in the increased use of ETFs inside retirement plans. One-third (34%) of respondents now report using ETFs in an employer-sponsored retirement plan, up from 31% in 2014.
¡°Millennials and Gen Xers are entering their peak earning years, and more than three-quarters of them are actively contributing to a work-based retirement plan,¡± said Johnston-Ketterer. ¡°Increased traction for ETFs in this space could be huge, both for the industry and for those individual providers that manage to get a meaningful piece of the action.¡±
