Advisers Have Growing Preference for Vanguard ETFs

A Cogent Research report shows advisers gravitating more towards Vanguard exchange-traded funds (ETFs) and away from the industry leader, iShares.  

Vanguard outranked iShares in adviser loyalty according to the Cogent “2010 Advisor Brandscape™” report which used “Net Promoter Score (NPS),” a standardized loyalty metric developed by Bain & Company, to gauge the results.  

According to the report, Vanguard received a Net Promoter Score of 33, whereas iShares tied for the #2 position with Spiders/State Street with a score of 20. Coming in fourth was PIMCO, a rookie ETF provider in 2010, with a score of 12.   

The advisers were asked to weigh various metrics, such as overall market penetration, level of commitment and share of wallet. The amount of business Vanguard has been receiving among advisers has more than doubled, from $2.3 million per user in 2009 to $5.5 million per user in 2010. This $5.5 million figure now rivals iShares’ per adviser AUM average of $5.7 million. 

“In terms of penetration, they have a long way to go to catch iShares, but right now the momentum is clearly with Vanguard” said Cogent Principal John Meunier.