Product Marketing Has Moved Upstream

The ETF marketplace is not simply becoming more crowded. It is becoming more organized around centralized portfolio decisions.

Introduction

I keep hearing the same thing from ETF sponsors. "We're in front of more advisors than ever, and the flows still don't follow."

Frankly, I think I know why.

The decision is moving. It's moving to home-office research teams, RIA chief investment officers, turnkey platforms, and model marketplaces. These groups decide what goes into a portfolio before one advisor looks at a single fund. They also judge your ETF differently. They don't ask whether it's interesting. They ask where it fits.

That changes how you market a product. It changes it a lot.

This is the second Insight in our Decision Advantage series. Read it with one question in mind. If a model committee met your ETF today, would the role it plays be obvious in the first minute?

The Significance of Upstream

For years, much of ETF product marketing focused on a familiar objective: generate awareness among financial advisors, equip wholesalers with a compelling story, and create enough interest for an individual advisor to consider allocating to a fund. That work still matters. Advisors remain essential decision-makers, interpreters, and client advocates. But the distribution environment is changing in ways that require a broader view of how ETFs earn adoption.

Increasingly, the most consequential decision may occur before an individual advisor evaluates a specific ETF for a client account.

It may occur inside a home-office research function. It may be made by a third-party strategist, an RIA chief investment officer, a turnkey asset-management platform, a model marketplace, an investment committee, or a unified managed-account program. These organizations build, govern, distribute, and monitor model portfolios that advisors can use across many client relationships. Their decisions can shape not only which products receive consideration, but also which products become easier for advisors to access, understand, implement, and explain.

This is the movement of product marketing upstream.

The implication for ETF sponsors is significant. The question is no longer only:

“How do we make more advisors aware of our ETF?”

It is increasingly:

“How do we help the right portfolio decision-maker determine whether our ETF deserves a credible role in a model?”

That is a different marketing challenge because a model provider is not evaluating a fund in isolation. The provider is evaluating the fund in the context of an existing portfolio architecture, a stated investment philosophy, a defined client audience, an operational system, and a governance process.

The product may need to compete not only with similar ETFs, but also with an incumbent holding, a mutual fund, an SMA, a direct-security allocation, a cash position, a derivatives overlay, or the decision to make no change at all. A product’s investment thesis may be sound and its features may be genuinely distinctive, but neither is sufficient if the sponsor cannot explain what portfolio job the ETF is designed to perform.

For a model decision-maker, the relevant questions tend to be practical:

• What portfolio need, risk, opportunity, or implementation challenge does this ETF address?

• Is it designed as a core building block, satellite exposure, tactical sleeve, diversifier, income allocation, completion vehicle, or replacement strategy?

• What would this ETF complement, replace, or improve within an existing model?

• How does its investment process support the role being proposed?

• What risk, liquidity, cost, tax, concentration, capacity, or monitoring considerations come with its use?

• Can the product be researched, implemented, communicated, and governed efficiently at scale?

These questions move product marketing closer to portfolio construction. They require the sponsor to translate the investment strategy into a credible explanation of portfolio relevance—not merely a description of features.

That is particularly important as models gain greater influence in advisory distribution. Morningstar reported that third-party model portfolios had more than $943 billion in assets under advisement as of March 31, 2026, representing 46% year-over-year growth. ETFs made up 55% of model allocations on average, up from 43% five years earlier. J.P. Morgan, citing Cerulli research, projected assets in asset-allocation models to exceed $2.9 trillion by the end of 2026, with third-party strategists directing more than 93% of their allocations to ETFs.

The direction of travel is clear even if the pace will vary by channel, firm, and advisor segment. Models are becoming a more important distribution infrastructure for ETFs because they can standardize portfolio construction, improve implementation efficiency, create a more consistent investment process, and allow advisors to devote greater attention to financial planning and client relationships.

For sponsors, this does not mean that the individual advisor no longer matters. It means the advisor is often working within a broader decision system. The advisor may select a model, personalize it, use it as a starting point, or explain it to a client. But the product-selection decision may have already been shaped by a centralized research process or an external strategist relationship.

Begin With The Intended Role

The marketing consequence is straightforward:

In a model-driven market, the product must be marketed as a portfolio component before it can be adopted as an individual fund.

That requires a shift in emphasis.

Traditional product marketing often begins with the fund: its manager, methodology, benchmark, holdings, fee, track record, or structural characteristics. Each of these elements can be important. But in a model context, the first question is usually not “What are the product’s features?” It is “Why does this deserve a place in the portfolio?”

A stronger model-ready narrative begins with the intended role, then provides the evidence that supports it:

The difference is not cosmetic. The portfolio-role framing gives the decision-maker a starting point for evaluation. It identifies the relevant use case, suggests the comparison that matters, and makes the product’s claims easier to test against the model’s needs.

This is where product marketing creates decision advantage.

Decision advantage is the practical edge a product gains when its intended audience can determine more quickly and confidently whether the product is relevant, how it might fit, what evidence supports the case, and what tradeoffs require review. It does not mean making complex investment products appear effortless or universally appropriate. It means removing unnecessary ambiguity from the evaluation process.

That distinction is particularly important in financial services. The goal is not to substitute marketing language for due diligence. It is to make due diligence more efficient, more focused, and more useful. A clear product story gives a research team a better starting hypothesis. It gives a distribution professional a more disciplined way to explain the product. It gives an advisor a framework for connecting portfolio construction to client needs. And it gives compliance teams a clearer basis for assessing whether product claims are specific, balanced, and supportable.

The most effective ETF sponsors will therefore treat model distribution as more than a placement opportunity. They will treat it as a product-marketing design requirement.

They will ask:

• Is our product’s intended role unmistakably clear?

• Have we defined the type of model or portfolio environment in which it is most relevant?

• Can a research team see how the product differs from the existing implementation?

• Do our materials show both potential relevance and material tradeoffs?

• Is there a coherent path from initial interest to formal due diligence, implementation, advisor education, and ongoing monitoring?

• Are we learning from the questions and objections that arise in real model-review conversations?

The sponsors that can answer these questions well will have an advantage that extends beyond awareness. They will be easier to evaluate, easier to explain, and easier to use. In an ETF market where attention is scarce and product choice is abundant, that is not a communications benefit alone. It is a distribution advantage.