They’re wealthy, they like ETFs, and they are using their own brains for at least some investment decisions rather than leaning on financial advisors.

That’s the case for about 40% of people with $5 million to $10 million in investable assets, new data from consumer-research firm Hearts & Wallets show. People in that group report being confident about investment decision-making — on average, seven times the level of investors across the wealth spectrum. Less than half of those in the affluent group said they see value in financial advice. And increasingly, exchange-traded funds are their vehicle of choice, with 61% of people in the group using them in 2024, up from 46% in 2023 and 39% in 2022. There are about 1.8 million people in the $5 million to $10 million range, and they control a total of over $14 trillion, according to Hearts & Wallets.

“They’re experimenting with things,” said Laura Varas, the firm’s CEO. “Their use of ETFs is just skyrocketing, and they’re trimming back their SMAs.”

Playing Favorites

While the 40% figure seems high, it’s trending downward, Varas said. Five years ago, 59% of people in that asset group said they relied upon themselves as their primary source of investment information. A current red flag, however, is that 30% view artificial intelligence as having a positive impact on financial services, compared with 20% among all investors, she added. The wealthy group is also moving money around frequently between different financial services providers and trading ETFs often, the report found.

Beyond the potential for clients to simply make poor investment choices, trading outside of the advisory relationship can throw their allocations out of whack, said Pamela Chen, founder of Refresh Investments. “Consequently, their overall investment portfolio deviates from the targeted asset allocation and risk profile, leading to unintended risk exposures,” she said. Another issue is taxes. “Many don’t fully understand the ramifications of selling out of a holding that has appreciated, and often the important difference between short-term and long-term gains is overlooked,” said Kristen Vernace, founder of Pathways Financial Planning.

It can be healthy for investors to trade by themselves, but wealthier households might limit that to 5% to 10% of their investable assets and treat it as “play money,” said Jose Alvarez, founding advisor at Harvest Horizon Wealth Strategies. Another advisor, Cynthia Meyer, founder of Real Life Planning, often works with real estate investors who have built considerable wealth. “Many like the idea of portfolio coaching, where they can collaborate with their advisor,” she said. “They don’t want an advisor to tell them to sell their real estate and put it in a brokerage account that benefits the advisor’s AUM.”

As to where the $5 million to $10 million group invests, according to Hearts & Wallets:

• Fidelity, Vanguard and BlackRock/iShares had the biggest share of customers of their ETFs.
• Most often, people were trading through Fidelity, Bank of America/Merrill Lynch and Morgan Stanley/ E*Trade.

It’s all about the price tag: Wealthier investors are keenly aware of what they pay, with just 5% of households last year saying they were unaware of fees, compared with 25% among all customers at the national level. “It’s part of a bigger fee-aversion story,” Varas said. “As they get more ETFs, they’re on self-directed platforms, and they’re making lots of trades.”

Crypto funds are about to become a whole lot more regulated — or deregulated, depending on who you ask.

After initial delays, the SEC has approved in-kind redemptions for spot Bitcoin and Ethereum ETFs. The decision is the first pro-crypto policy decision by Paul Atkins, the SEC chair confirmed earlier this year who is expected to help realize crypto evangelists’ digital currency dreams. The move also is the first major indication that the crypto industry — whose super PACs donated tens of millions to President Donald Trump’s 2024 campaign — is getting what it expected.

The decision marked “the biggest day for crypto in the history of the space,” said financial consultant Tyrone Ross Jr. “This administration, whether it’s custody, whether it’s on-chain, whether it’s ETFs … they’re making sure that crypto thrives in America.”

Will That Be Cash or Crypto?

In-kind redemptions let investors create and redeem shares of spot crypto ETFs without having to use cash — meaning authorized participants, the people with the power to change the number of ETF shares on the market, can now add or remove assets from a fund using Bitcoin or Ethereum. In a statement on the approval, Atkins said the decision is only the first step toward building “a rational regulatory framework for crypto.” But how much of these changes can be attributed to the Trump administration? “One hundred percent,” said Ross. “They are hell-bent on America becoming the main hub for crypto in the world.”

Other measures approved by the agency were:

• Advancing a “merit-neutral” approach to crypto-based products, including applications for spot crypto ETFs.
• Allowing FLEX options on shares of certain Bitcoin ETFs that let investors customize things like expiration date and strike price.

The SEC’s likely next move is specifying which coins are and aren’t securities, Ross said. “That’s the big one that everyone is still waiting for,” he said. The Commodity Futures Trading Commission is also likely to eventually update its guidance on what it will oversee, he added.

Keeping Options Open. In-kind redemption approvals took place alongside another policy change to increase positions limits for options trading on BlackRock’s spot Bitcoin exchange-traded fund, IBIT — the biggest crypto ETF on the market — from 25,000 to 250,000 contracts. BlackRock has been among the most prominent issuers pushing for deregulation, having filed for in-kind redemptions back in January. “It’s huge for the individual investor. It’s huge for BlackRock,” Ross said. “It’s huge for the entire space.”

Who knew that derivative income would be such a selling point for ETFs in 2025?

Goldman Sachs apparently did — and its two fastest growing exchange-traded funds are evidence of that. In the first half of the year, the Wall Street firm’s Nasdaq 100 Premium Income (GPIQ) and S&P 500 Premium Income (GPIX) ETFs have more than doubled in size, with each attracting more than $700 million in sales. The funds are relatively young, at about two years old, and at $1.2 billion each are small compared with the likes of the $70 billion Schwab US Dividend Equity ETF (SCHD). But demand for the category is vast, and it is likely to grow.

“This is just really a representation of the search for diversified sources of income from US investors,” said Alyson Shupe, head of the global product strategy group for Goldman Sachs Asset Management, adding that the two ETFs “have really been able to differentiate themselves within the market to tap into that continued investor interest.”

Appreciate It

It’s helped that the Goldman ETFs offer returns in addition to income, even if they provide “lower highs and higher lows” than the market, said Sirion Skulpone, managing director in quantitative equity solutions at Goldman Sachs Asset Management. “The derivatives income ETFs offer something that traditional fixed income doesn’t, which is high potential for capital appreciation,” she said. “A lot of investors want to maintain equity exposure but are maybe looking for that smoother ride.” Using a “dynamic options writing strategy,” the ETFs have captured 85% of the market upside while providing monthly distributions of about 8.5% (GPIX) and 10.5% (GPIQ), she said.

It follows that demand is increasing as more people approach retirement, she said.

Figures from Morningstar Direct show that in the first six months of 2025:

• Flows into all US derivative income ETFs were over $32 billion.
• Net assets in the category hit nearly $128 billion.

Don’t Expect the World: As investors have shown more interest in derivative income, Goldman has increasingly focused on helping them understand how the products work, Skulpone said. “In a really strong market, we expect them to underperform.”