Advisor ETF preference has climbed to 60% from 53% in 2022, while mutual fund selection has halved – and RIA portfolio data show the shift is only deepening.
When the same strategy is available in three different wrappers, most financial advisors aren’t thinking twice: They’re going with the ETF.
That’s the long and short of a recent advisor pulse report from ISS Market Intelligence, which asked advisors to choose between an open-end mutual fund, a separately managed account, and an ETF – assuming the same strategy and asset manager across all three options. Sixty percent in the poll selected the ETF, while SMAs came second at 30%. Mutual funds brought up the rear at just 10%.
The numbers mark a meaningful shift from 2022, when ETF preference stood at 53% and mutual fund selection was twice as high at 20%.
RIAs lead, but the bias cuts across channels
The findings from ISS revealed that ETF conviction is not equal across advisor channels. RIAs showed the strongest preference, with 80% selecting ETFs as their first choice – something ISS attributed to the channel’s longstanding emphasis on transparency, cost control, and tax efficiency. Bank-independent advisors and regional broker-dealer advisors followed at approximately 60%, reinforcing ETFs as a dominant portfolio building block across mainstream advice channels.
Wirehouse advisors were a notable exception, emerging as the only group to favor SMAs the most. ISS linked that to the higher concentration of high-net-worth and ultra-high-net-worth clients at wirehouses, where customization and tax management create a genuine case for the SMA structure. Even so, nearly 40% of wirehouse advisors still selected the ETF, underscoring how far the wrapper has penetrated even the most traditionally product-agnostic channel.
Standalone ETFs win over ETF share classes – for now
Not all ETF adoption debates are settled. FUSE Research’s product usage survey from November found that while the ETF wrapper still reigns supreme, the form it takes is still being contested.
Following the SEC’s approval of ETF share classes tied to existing mutual funds, the industry had anticipated a potential wave of interest. But FUSE’s survey, drawn from more than 550 financial advisors across all channels, suggests the wave has not arrived.
Slightly more than half of advisors (51%) expressed a preference for standalone ETFs, with 28% indicating strong preference and 23% showing some preference. By contrast, only 13% favored an ETF share class structure. Thirty-seven percent reported no preference between the two options.
“Advisor enthusiasm for ETF share classes remains measured,” said Mike Evans, partner and director of Advisor Research at FUSE Research Network. “While the approval opens the door to innovation, most advisors continue to prioritize the transparency, liquidity, and simplicity of standalone ETFs.”
FUSE analysts noted that fee compression and operational readiness remain the primary hurdles for ETF share class expansion. The preference for standalone ETFs was also consistent across channels and asset levels – wirehouse advisors, RIAs, and independents all showed similar patterns, suggesting the issue is structural rather than channel-specific. Asset managers have responded selectively, introducing ETF share classes on established funds with sufficient scale to manage margin and cannibalization risks.
“Over time, as operational frameworks and distribution support evolve, we may see greater comfort and adoption,” Evans said. “But for now, the standalone ETF remains the preferred vehicle for most advisors.”
RIAs are diversifying, not consolidating
Providing a more granular picture of how RIA portfolios are actually being constructed, AdvizorPro’s 2026 RIA ETF Trends Report analyzed 13F filings from 4,237 registered investment advisors across Q4 2024 to Q4 2025. The findings depict an ETF market that’s maturing, but still expanding.
The average number of ETFs held per RIA firm rose 13.7%, from 77.7 to 88.3. More than two-thirds of firms (71.4%) increased their ETF count over the period, while 20.5% reduced it and 8.1% held steady. The median ETF count per firm climbed from 42 to 47, a gain of 11.9%. Rather than concentrating into fewer, higher-conviction positions, RIAs are spreading exposure across more funds and more strategies.
Turnover, meanwhile, is declining. The average ETF turnover ratio across the 4,237 firms was 36.3% – meaning roughly one-third of holdings changed between Q4 2024 and Q4 2025. That compares with approximately half of all ETF holdings turning over the prior year, a meaningful deceleration that AdvizorPro interprets as a sign of portfolio stabilization.
RIA advisors are still adding new ETFs – 41.9% of holdings were newly added over the period – but they are removing fewer (18.1%), suggesting lineups are becoming more deliberate and durable rather than driven by tactical reshuffling.
The largest providers all saw declines in the number of RIA firms holding their ETFs. BlackRock’s iShares fell 7.7%, from 4,740 to 4,374 RIA allocators; Vanguard dropped 3.8%, while Invesco slipped by 4.6%.
Meanwhile, smaller and more specialized issuers gained ground. Dimensional grew 6.7%, adding 110 RIA allocators, while JPMorgan rose 2.0%, and VanEck edged up its market share by 0.9%.