ETF Use by RIAs Keeps Climbing

The heart wants what the heart wants. And a lot of hearts apparently want ETFs.

The use of exchange-traded funds among advisors and investors continues to grow, becoming the primary way many of them build portfolios, two recent reports show.

“This year’s data suggests the ETF market is entering a more mature phase,” a paper late last month from AdvizorPro stated. “Advisors are still adding new funds and exploring new strategies, but allocations are becoming more deliberate, more diversified and increasingly tied to specific portfolio roles.”

More Is More

The average number of ETFs used by RIAs rose from 78 to 88 from the fourth quarter of 2024 through the fourth quarter of 2025, a 14% increase, that report found. More than 70% of RIAs indicated they added more ETFs. Advisors also appear to be more comfortable with the ETFs they have chosen, with turnover declining from nearly half of holdings in 2024 to about one third in 2025, according to the data across more than 4,000 RIAs.

But they also like what’s new, a separate report last week from Brown Brothers Harriman found. All but 1% of the RIAs and big investors the firm surveyed globally said they would consider buying private assets in the ETF wrapper, and 82% said they’d buy the ETF share class of a mutual fund. Over 60% indicated they plan to increase the number of ETF issuers they choose for portfolios, and in the US, 98% of investors said they plan to hike their use of ETFs.

RIAs are also picking up ETFs from newer entrants to the market, another report last week from AdvizorPro shows:

• Tom Lee’s Fundstrat (home to the Grannyshots ETFs) saw the number of RIAs using the funds increase by 173% last year (from 78 to 213).
• RIAs using NEOS Funds, which focus on options-based income ETFs, increased by 134% (going from 221 to 518).
• Some of the larger, more established firms also ramped up their RIA footprint significantly, including Virtus, Calamos, BlackRock, Morgan Stanley and Putnam.

What’s Next: Did anyone else notice that the VIX is up 67% year to date? “2026 will be the year of defined outcome ETFs,” BBH global head of ETF product John Hooson wrote in that firm’s report. “Although many prognosticators see the S&P appreciating by the end of the year, the path to get there may include pronounced periods of volatility.”