Individual clients with retirement accounts benefit most from cheaper fees and tax efficiencies from dual-share class ETFs
From Yahoo Finance: 2025-06-16 06:10:00
Asset managers are preparing for the approval of ETF dual share classes, converting existing mutual funds. Vanguard recently filed for approval, allowing mutual fund shareholders to avoid capital gains distributions. Experts say advisors need education to stay ahead of the curve with the benefits dual share classes offer, including cheaper fees, transparency, and flexibility.
Clients with retirement accounts stand to benefit from ETFs’ cheaper fees, lower administration costs, and tax efficiencies. ETF reporting standards will provide shareholders with more transparency about where their money is going. Dual share class approval will allow for investing in mutual fund equivalents of ETFs not typically allowed in certain 401(k)s due to company rules.
Educating both clients and advisors is crucial as mutual funds may play a diminished role in the investment landscape. Seventy percent of the country’s assets are with people over the age of 65 who may not understand their investments. The shift towards dual share classes in ETFs will bring changes that need to be communicated effectively to investors.