"ETFs have gone from representing a very small part of [advisors'] tool kit to now representing a very significant part," said certified financial planner David Yeske, managing director of Yeske Buie.
"One of the things it suggests is that financial planners are ever more convinced that active management is hard," said Yeske, who helped develop the survey and interpret its results.
Unlike actively managed mutual funds — where a professional picks the individual holdings of a fund — ETFs track indexes, making them passively managed.
The survey also shows that 77 percent of advisors now think a blend of active and passive management delivers the best overall performance. That number stood at 64 percent last year and 57 percent three years ago.
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As for the increase in cash-type investments, Yeske said it could signal that advisors are taking a more conservative stance on the market.
"This makes me think that planners are feeling a sense of caution about the investment world and are building resilience in client portfolios," said Yeske, who worked on the survey in his role as an editor at the Journal of Financial Planning.
Advisors' use of cash has remained high following the 2008-2009 housing crisis and accompanying market nosedive. In the 2008 survey, before the crisis came to a head, 52 percent of advisors were using cash or equivalents. By 2010, that figure had jumped to 84 percent. The general trend since then has been a continued high use, although this year's figure of 85 percent is up from 74 percent a year ago.
The survey — a collaboration of the FPA, the Journal and Longboard Asset Management — also shows that half of responding advisors plan to increase their use or recommendation of ETFs over the next year. That's compared to 20 percent planning to increase their use of mutual funds and 19 percent for individual stocks.