Major U.S. ETF provider WisdomTree launching in Canada

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One of the top American companies for exchange traded funds is coming to Canada, hiring a familiar face in retail distribution to help make a splash.

Wisdom Tree Investments is a leading ETF provider south of the border, ranking as a top-five player when judging by assets under management. The company is now looking to launch here and offer a suite of funds tailored to Canadians.

The Canadian arm will be run by Raj Lala, who previously served as head of retail distribution at Fiera Capital, a burgeoning asset manager based in Quebec. Lara Misner joins as chief compliance officer, having joined from Purpose Investments.

WisdomTree CEO and President Jonathan Steinberg has kept a close eye on the Canadian market over the past four years, but upcoming regulatory changes to fee transparency in Canada was the final push for the company to make its move.

The changes- known as CRM2- or the second phase of the client relationship model- comes into effect July 2016 and will require investment firms to disclose greater transparency on fees as well as fund performance.

"The power of CRM2 is why we are coming," said Mr. Steinberg, in an interview with the Globe and Mail.  "We are extremely excited on the Canadian regulator's execution of CRM2 and believe it will have a profound effect on the growth of ETFs in Canada."

In the span of six months ETFs have become one of the hottest products for Canadian asset management, and a slew of firms are piling in. Canadian-listed ETFs ended the first quarter at a new watermark of $95.2-billion, according to research by Investor Economics.

WisdomTree's arrival also marks the third ETF provider to announce new plans this week. Mackenzie Investments entered the market with four actively managed ETFs, while Sphere Investments introduced four ETFs that track the FTSE Sustainable Yield Index. Already Sphere has plans to add another 26 funds within the next two years.

Oversaturation of the market doesn't concern Mr. Steinberg, who says he isn't surprised at all to see multiple players entering during this time- and he expects more to come soon.

"ETFs are to the mutual fund what the Internet is to the newspaper," said Mr. Steinberg. " With the regulatory push behind it, we will see some very fast growth moving forward in Canada. We already compete with some very strong players in the U.S and Europe and we will continue to do what we do in those markets north of the border."

The company's arrival comes as the entire asset management industry endures what TD Asset Management head Tim Wiggan recently referred to as a "seismic shift." In Canada specifically, regulatory pressure on mutual fund fees has helped the ETF market explode -- WisdomTree will be the 18th provider of such funds here.

Across North America there is also the appearance of so-called 'robo advisers,' which help clients manage their investment savings using online platforms. These products are often backed by a suite of ETFs, because their computer programs pick and choose for clients from a select group of funds.

Mr. Steinberg wouldn't comment on whether the company has plans to distribute through specific Canadian robo adviser platforms – but did confirm the primary method of distribution in the U.S is through financial intermediaries and he expects the same for the Canadian market.