In conversation with AltFi’s David Stevenson at last week’s conference, the ETF Securities founder said that today’s alternative credit companies reminded him of where ETFs were last decade, when the ETF industry was nothing more than a small group of people speaking mainly to themselves.
“I think that fintech is where ETFs were about 10 years ago. In the early years it was just the industry talking to itself, it later exploded.”
He advised that for fintech to succeed like ETFs did it is critical to get fintech defined as an asset class, both in order to raise its profile and distinguish it from competition. He said that this was a defining moment in the growth of ETFs.
“You need to get defined as an asset class. For us that was one of the major breakthroughs.”
He added that in the case of ETFs this was done not through targeting customers and channeling market forces, but by going after those in positions of influence.
“Its partly through the media, through the regulator and through the exchanges.
“The big push was at all the influencers and there was major leverage when the financial advisers started coming along. So instead of marketing to customers, it is better to market to the influencers. It’s too expensive and hard going to customers — so go to the intermediaries.”