In a recently published article, Ernst & Young LLP examines the preparatory processes financial firms undertake as they launch an exchange traded fund (ETF). The focus of the article is on how financial services firms should thoroughly understand their strategies for success and how the firm's existing competitive advantages, brand strength, distribution capabilities, and industry position can be leveraged as it moves into the ETF industry. The article also examines how firms can successfully use third-party service providers to support their ETFs and enhance the the fund complex's organizational assets.
According to the article:
As would-be providers ponder entry into the growing ETF segment and attempt to identify untapped market niches, they must commit the resources to comprehensively understand how new product offerings will support their business strategies. They also must review their current capacity to deliver competitive low-cost product in an untapped niche. After all, in the ETF space, first-mover advantage is essential to success, and a firm's operational capabilities are what deliver that advantage.
Fund directors may find this article useful and interesting if their fund complex has recently launched an ETF, or is considering moving into the ETF market. In addition, the article provides some valuable lines of thought for directors new to an ETF board.
This article is one of a series by Ernst & Young LLP on ETFs.
The full text of the article is available at: http://www.ey.com/US/en/Industries/Financial-Services/Asset-Management/ETF-creating-strategic-and-operational-models