ETF White-Label White Papers


How does a white label platform work?

An ETF White Label Platform enables an ETF Sponsor to launch an ETF without incurring the high cost of building and running a Trust. ETF Architect runs all aspects of running an ETF and enables its clients to focus on distribution and running their strategy.

The high-level services provided by ETF white labels can be broken into three core components:

  1. Legal/Regulatory/Compliance
  2. Portfolio Management
  3. Marketing/Distribution

ETF Architect offers #1/#2 because we believe #3 should be flexible and open architecture and bank custody platforms offer #1. There are several other white labels that offer #1, #2, and #3 in one package.

Do I need to hire a Sub-Adviser to do trading? Who trades my ETF?

We bring a best-in-class trading and execution team as part of our service offering. There is no incremental need to hire trading personnel or outsource trading to a third party. Most importantly, ETF Architect prides itself in high-quality trading operations, thereby ensuring your shareholders are afforded a fiduciary level of care in the execution of its duties.

Am I an Adviser on the Trust? A Sub-Adviser?

Both options are available.

How is billing handled? Do I enter into a lot of service agreements?

ETF Architect provides a single, clean invoice on one page. We include all accounting, billing, and invoice payments as part of our low, fixed fee. You enter into a single contract.

Do I get to choose my listing exchange?

Yes. ETF Architect works with all three listing exchanges (NYSE, NASDAQ, CBOE)

What other costs are there that I should know about?

All fund sponsors will need EO/DO insurance and have to cover certain variable costs. We seek to keep these costs as low as possible and bill them passthrough (i.e., no markup).

What types of funds can your platform handle?

Our platform can support any fund type with the appropriate partner. Each strategy type is evaluated on a standalone basis (e.g., equities, fixed income, futures, etc.).

What are your screening criteria?

We do not seek to be the largest platform or the platform with the most funds. We grow slowly and selectively, opting to partner with high-integrity firms with a demonstrable chance of success. At a minimum, we expect partners to possess $500k in operating capital, $5M of launch capital for the ETF on Day 1, and a reasonable roadmap to $50M in fund AUM.

What is your pricing?

Pricing is developed on a case-by-case basis.

What do I need to do in order to launch an ETF?

We launch a new ETF via three key workstreams: SEC approval, Board approval, and internal compliance program development. Launch times can vary widely based on the Sponsor’s registration status, ability to iterate on board materials, and desired launch date. A launch can occur as quickly as 90 days.

How much does it cost to launch an ETF?

Launch costs are incurred and passed on without markup to you. We rely on select vendors curated over many years to ensure the lowest costs possible.

Who can start an ETF?

Sponsors must be willing to register with the SEC as a Sub-Adviser, or if an index provider, establish a robust compliance program subject to Board approval. While anyone can start an ETF, we screen candidates for a commitment to compliance and a robust, viable business plan.

Is it hard to run an ETF?

For normal people, yes. For combat Marines, no.

Do you convert mutual funds into ETFs?

Yes. Mutual fund conversions are becoming increasingly common. Additional costs are required to ensure a smooth conversion; however, the process itself is common.

Do you convert hedge funds into ETFs?

Yes. We can (and have) converted hedge funds into ETFs. The analysis will be conducted to confirm eligibility and a workplan for conversion. Additional costs apply.

Do you convert SMAs into ETFs?

This is possible; however, it is the most difficult of the three conversions to undertake. The analysis will be conducted to evaluate conversion potential. Additional costs apply.

Does your firm help me with distribution? I have a great idea, but need help selling.

Distribution IS the ETF business. More importantly, distribution requires a highly customized, bespoke approach. What may be the viable path for one fund is NOT a viable path for another. We prefer to provide bespoke 1:1 consulting on distribution, as required, and we will leverage our network on your behalf. Distribution expenses can get costly, fast. As such, we will not provide canned distribution services or packages upfront, but rather, will work with you to assess where your strengths and weaknesses are, what stage of ETF growth you anticipate being in, and how a comprehensive distribution strategy can leverage those points.

The Alpha Architect and ETF Architect relationship

Empirical Finance, LLC (“Empirical”) is a holding company that has 100% ownership of ETF Architect (Empowered Funds, LLC) and Alpha Architect (Alpha Architect, LLC). ETF Architect is focused on providing advisory services to ETFs; Alpha Architect is focused on intellectual property development and managing SMAs.

Wesley R. Gray (majority owner), John “Jack” Vogel, Patrick Cleary, Ryan Kirlin, and Dave Babulak are equity owners of Empirical.

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