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At the 2025 Charles Schwab IMPACT Conference in Denver, David Botset, Head of Strategy, Innovation, and Stewardship at Schwab Asset Management, shared new insights from Schwab’s latest ETFs and Beyond study—a research series now spanning more than a decade. This year’s findings point to a striking transformation in investor behavior and advisor opportunity: ETFs are no longer just a component of portfolios; they’re becoming the foundation.
According to the 2025 study, 62% of ETF investors can envision an all-ETF portfolio—and half say they could get there within five years. That confidence, Botset explains, signals something deeper than enthusiasm for a single product structure. It marks a broader cultural shift toward cost discipline, accessibility, and portfolio flexibility that advisors can’t afford to overlook.
“One of the biggest drivers is a heightened focus on saving costs in investments,” Botset says. “ETFs have demonstrated over time an ability to deliver exposures at lower costs. Advisors should be talking and educating their clients about ETFs because if they’re not hearing it from their advisor, they’re hearing it from other avenues.”
ETF Education: A Competitive Imperative for Advisors
The shift to ETF-only portfolios isn’t just about saving on expenses—it’s about aligning with investor expectations. With nearly two-thirds of current ETF investors entering the market within the past five years, and nearly half of non-ETF investors planning to buy ETFs within two years, advisors are serving a fast-growing and evolving demographic.
Younger investors, particularly Millennials, are leading this charge. They’re exploring areas such as thematic ETFs, spot crypto, and single-stock strategies, seeking both innovation and personalization within their portfolios. Advisors who help clients balance that enthusiasm with sound portfolio construction can build stronger advisory relationships rooted in education and trust.
“Younger investors are looking for different types of exposures,” Botset notes. “They’re more apt to look at things like cryptocurrency or more thematic plays than some of the earlier investors, who tended to focus solely on core holdings.”
For advisors, the takeaway is clear: as product innovation accelerates, investor sophistication is rising alongside it. What clients seek now is context—understanding how to use these vehicles responsibly and effectively within diversified plans.
Resilience and the Long-Term View
One of the more compelling findings from the 2025 report is that ETF investors remain remarkably steadfast amid market uncertainty. Rather than retreating when volatility spikes, these investors are leaning in.
“When we look at the data, it demonstrates that investors are taking the long-term view with their portfolios,” Botset explains. “They see market disruptions as opportunities to put more money to work rather than reasons to pull back. There used to be a perception that ETFs’ tradability would lead to market timing, but what we’re actually seeing is that investors tend to stay invested over time.”
For financial advisors, this long-term behavior supports a more efficient, scalable advisory model: one built around disciplined, rules-based ETF portfolios that can weather market cycles and client emotions alike. This investor maturity means advisors can focus less on trade execution and more on holistic planning and behavioral coaching.
Balancing Core Strength with Access to Innovation
While many new ETF investors are exploring thematic and niche opportunities, Schwab’s approach to innovation remains anchored in its core philosophy of access, transparency, and simplicity. Botset emphasizes that Schwab Asset Management is strategically focused on building and maintaining core building blocks—the essential portfolio components advisors depend on.
“From an asset management standpoint, we really focus on core products,” Botset says. “The great thing is that we don’t have to be all things to all people, because on the Schwab platform, other asset managers provide those thematic or more specialized products that investors can still access.”
This approach benefits advisors by helping them construct efficient portfolios under one comprehensive platform. Schwab empowers advisors to mix foundational strategies with select specialty or active ETFs, depending on client goals, all while maintaining cost control and product simplicity.
And as active ETF strategies gain momentum across the industry, Schwab continues to track where innovation can deliver the most meaningful impact. “When I started in the ETF business, ETF was a synonym to indexing,” recalls Botset. “That’s no longer the case. We’re seeing growth in active ETFs that aim to blend transparency, low cost, and the potential to outperform traditional benchmarks.”
Fixed Income ETFs: The Quiet Catalyst of 2025
With 45% of ETF investors planning to increase their bond allocations, fixed income has reemerged as a critical frontier of ETF innovation. Advisors seeking to navigate higher for longer interest rate conditions are finding renewed utility in fixed income ETFs for liquidity, diversification, and active management potential.
Schwab Asset Management has responded decisively, expanding its fixed income lineup to meet this demand.
“That’s where we’ve spent most of our recent development efforts,” says Botset. “We’ve launched a mortgage-backed securities ETF, a core active fixed income product, and an ultra-short product. We’re listening to clients and delivering fixed income solutions that fit this new rate environment.”
For advisors, the evolution of Schwab’s fixed income suite means greater flexibility in matching duration, yield objectives, and risk tolerance across client segments. Whether for clients rebalancing toward stability or those seeking yield enhancement, fixed income ETFs are increasingly serving as advisor-friendly tools to address complex market conditions.
Cost, Choice, and Communication
A throughline across the conversation with Botset is the importance of informed cost comparison and transparency. Not all ETFs serve the same purpose or carry the same fee structures—and that distinction matters when guiding clients.
“Many people look at an index-based strategy at three or five basis points and compare it to an active strategy at 40 or 50 basis points,” Botset explains. “That’s not always the right comparison. A comparable active mutual fund might be 80 or 90 basis points—so even at 40 or 50, the ETF remains a cost-effective way to pursue active management.”
This contextual cost conversation offers advisors an opportunity to demonstrate value—not only by helping clients save on fees but by helping them understand where ETFs fit best across active and passive strategies. Advisors who can clearly articulate the trade-offs between cost, flexibility, and exposure are positioned to stand out in an increasingly ETF-dominant advisory landscape.
The Next Chapter of ETF Stewardship
As Schwab’s ETFs and Beyond study moves into its second decade, it’s clear that ETFs have matured from an emerging trend into the central investment vehicle of modern portfolios. Advisors now sit at a pivotal moment: client familiarity is high, but so are expectations for guidance, personalization, and performance insights.
Botset and his team at Schwab Asset Management are supporting this evolution by maintaining a dual focus—advancing product innovation while upholding the investor-first principles that have defined the Schwab brand. That blend of innovation and stewardship is precisely what advisors need as they guide clients toward ETF-driven futures.
“We’re always listening to investors to help guide our future decisions about product development,” Botset says. “Our focus on the core remains, but the feedback we gather helps us stay aligned with where investors—and advisors—are going next.”
For financial advisors, the message is clear: ETFs are more than a tactical tool. They’re becoming the blueprint of portfolio design, client engagement, and sustainable advisory growth. Schwab Asset Management’s research, product suite, and investor education resources are giving advisors the clarity and confidence to lead in this new era.
Explore Schwab Asset Management’s ETF lineup and insights at SchwabAssetManagement.com.
Related: Beyond ETFs: Why Advisors Are Turning to Schwab’s New Direct Indexing Model