SMA and ETF Momentum Builds – IMEA All-Council Fall Summit: Product Council Highlights

Mar 2, 2023 | Asset Management

Wentworth Financial Communications attended the 2022 IMEA All-Council Fall Summit in New York along with CMOs, distribution leaders, and other marketing and sales professionals from across the asset management industry.

We never miss a chance to attend Investment Management Education Alliance (IMEA) conferences to hear some of the top minds in the business share their firms’ approach to marketing, product development, diversity, data analysis, and industry trends.

Here are some of the highlights and key takeaways from the Product Council’s breakout sessions at the IMEA Fall Summit.

SMAs – The Future of Personalized Investing?

As advisors look to deliver greater levels of personalization and tax efficiency for clients, SMA sales have grown about twice as fast as mutual funds since 2017. SMA fees and minimums continue to decrease, so these vehicles are poised to continue gaining market share for investors across asset levels. The Product Council looked at the marketing, distribution, and operations challenges facing asset managers as they scale and expand their SMA offerings.


  • It remains to be seen just how far down market SMAs will go, as technology and competition continue to reduce fees and minimums. In addition to figuring out the economics of smaller accounts, asset managers need to decide what levels of service and customization make sense to provide for various customer segments.
  • Values alignment can mean much more than just ESG overlays. As ESG becomes an increasingly polarizing issue, asset managers can emphasize SMAs’ ability to reflect an investor’s unique beliefs and interests.
  • Even though direct indexing dominates much of the attention and asset flows, SMAs provide a huge opportunity for active managers. This is especially true for managers with highly differentiated strategies.
  • Scaling SMAs isn’t just about technology and operations; asset managers need to scale their SMA distribution capabilities. This requires training wholesalers who are used to selling funds on the nuances of SMAs and having a team of SMA product specialists.
  • Service is a critical differentiator for SMA delivery. In addition to streamlining the onboarding process, SMA providers need to be highly responsive in executing redemption requests and answering advisors’ questions. These service requirements illustrate the challenges of scaling SMA delivery.
ETFs – Where Do You Fit In?

The growing popularity of active ETFs raises important questions for asset managers about how they can curate their lineups of ETFs and mutual funds and bring new products to market. The panel explored decisions asset managers face in terms of fund construction, pricing, and product development.


  • Since the introduction of semitransparent active ETFs more than two years ago, uptake by the industry has been slow. But that could change as these funds hit their three-year anniversaries, making it easier for them to get on platforms.
  • Cloning mutual fund strategies as ETFs can create a host of regulatory, marketing, and commercial challenges. To avoid outright cloning, asset managers can create elements of differentiation between mutual funds and related ETFs, such as allowing the ETF to go further down the market capitalization structure.
  • Pricing ETFs relative to mutual funds is part art and part science. Asset managers need to account for the different mindsets of mutual fund buyers vs. ETF buyers and be able to justify pricing differences between mutual funds and ETFs based on similar strategies.
  • When converting mutual funds to ETFs, the focus needs to be on creating a seamless experience for investors. This requires extensive collaboration with custodial platforms and broker-dealers to think through the many implications of a conversion.
  • Successful ETF product development is the result of finding white space and being able to quickly bring products to market. Launching ETFs as part of an entire suite has become less common over the past decade as the proliferation of funds has reduced the amount of white space in the market.

Highlights provided in partnership with Investment Management Education Alliance (IMEA)

About the Author Scott Wentworth, CEO at Wentworth Financial Communications. Scott leads a team of writers and editors at Wentworth to help firms across the financial services industry build their brands and articulate their expertise by creating investment-grade content.

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