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The lack of adviser information has plagued the rapidly growing ETF industry, which competes in a market where investors are heavily invested in mutual funds.

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Exchange-traded fund providers say they're at a disadvantage compared to their mutual fund competitors and are aiming to level the playing field with a new lobbying effort to obtain data on the financial advisers who sell ETFs.

The initiative, which is being spearheaded by the Canadian ETF Association (CETFA), will provide ETF companies with information on the financial advisers who are selling exchange-traded funds, and the breakdown on which funds they are selling to their clients. Mutual fund companies already receive such information.

If implemented, it could result in a surge of ETF sales within the Canadian marketplace.

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The lack of adviser information has plagued the rapidly growing ETF industry, which competes in a market where investors are heavily invested in mutual funds. Canadians hold more than $1.22-trillion in mutual funds compared to $80-billion in ETFs, as of February, 2015.

Currently, ETF providers may receive a report from an individual investment firm that shows the total number of ETFs held by their clients. But the reports are not sent on a regular basis and do not include information on the individual financial advisers who purchase the funds on behalf of clients.

Mutual fund companies currently receive an adviser and dealer representative code when funds are purchased. Since ETFs are sold on an exchange, that transaction does not capture the same data as mutual funds, leaving ETF providers at a disadvantage when it comes to targeting sales.

"We want to make sure investors are being serviced by advisers who are getting quality support," says Howard Atkinson, president of Horizons ETFs Management Inc. and the chair of CETFA. "As an ETF provider, how can you provide excellent client service when you don't know who is buying your product?"

CETFA is proposing to close this gap by appointing a third-party provider to administer buyer information. CETFA is not proposing financial firms release information about the individual investor holding the ETF, only the adviser who is selling the fund. Competitor information would not be accessible.

The information would allow ETF providers to support advisers and the branches that sell their funds. Providers will be able to notify advisers of any changes or updates to the funds including index changes, shifts in investment style or size of investment, portfolio management changes, as well as new offerings that complement what an investor already owns.

"As a provider, you might be emphasizing small cap over large cap or that it is time to emphasize an equal weighted portfolio," says Mr. Atkinson. "But who do you tell if you don't know who owns it? The adviser information on who owns your ETFs would allow us to provide a higher level of service to those individuals, and the clients they work with."

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But revealing information could give rise to additional conflicts for investors. Back in the early 1990s, the mutual fund industry was criticized for handing out extravagant rewards to top-selling advisers, including free trips, expensive gifts and payments for marketing expenses. Regulatory changes in the industry saw a decline in these luxury items, but there is concern that advisers with top ETF sales could still be rewarded by providers in some way.

"There are still ways that the fund companies can reward advisers, they are just not as blatant as they were in the past," said Glorianne Stromberg, a former Ontario Securities Commission commissioner who advocated for mutual fund regulation. "All the bad habits of the fund industry risk being transferred to the ETF industry."

Dan Hallet, vice-president and principal with HighView Financial Group, commented that there are valid business reasons for wanting more transparency on who owns ETF units. "The ETF segment is small enough that the industry can and should start on solid ethical footing should they get the data they want," he said.

CETFA is hoping to finalize the third-party provider by the end of April, but financial firms won't be mandated to hand over information. It will be on a voluntary basis.

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