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Pershing Launches ETF Platform Absent Transaction Fees, Purchase Minimums

Financial advisors asked Pershing to help lower costs so they eliminated explicit fees for some funds.

BNY Mellon launched a new exchange-traded fund platform Thursday absent transaction fees, in hopes of drawing more of the money flowing into passive strategies and products.

The new FundVest ETF platform — which all Pershing clients will have access to — requires no purchase minimums or holding period, said Justin Fay, Pershing’s director of Financial Solutions who is responsible for alternative investments and ETFs.

Pershing announced it was working on the FundVest ETF platform at its 2016 INSITE conference for financial advisors. Advisors and other clients had been asking Pershing to help lower explicit costs through an ETF platform similar to the firm’s longstanding FundVest for mutual funds, Fay said. 

The platform for mutual funds has been around for more than 20 years, but interest in ETFs has surged recently. 

The vast majority of advisors (88 percent) are using or recommending ETFs, up from 83 percent in 2016 and 40 percent in 2006, according to a survey from the Financial Planning Association, Longboard Asset Management and the Journal of Financial Planning.

After last year’s announcement, Fay said Pershing began communicating with numerous ETF providers about offering funds on the platform. Those the company ended up partnering with include Direxion, Guggenheim Investments, PowerShares by Invesco, OppenheimerFunds, PIMCO, Reality Shares and SPDR ETFs from State Street Global Advisors.

State Street is one of the biggest players in the ETF space. Together, the Boston-based investment management business, BlackRock and Vanguard oversee 83 percent of the U.S. ETF market and the 50 largest funds in the world.

Pershing intends to add more fund providers, but Fay said there is no definitive timeline for when that will happen or what companies they will partner with.

Fay also would not comment on Pershing’s partnership with State Street or lack of one with Vanguard or BlackRock.

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