In the fast-evolving ETF market, opportunity is abundant, for both issuers and investors.
But as interest in launching ETFs continues to grow, so too do misconceptions about what it takes to maintain control over an ETF.
Many assume that being an adviser grants more influence than being a sub-adviser.
In reality, the truth is more nuanced and hinges less on titles and more on trust management and governance, operational agreements, and platform support.
Let’s explore the tradeoffs, clarify the myths, and provide a practical lens into what “control” really means in the ETF ecosystem.
The Illusion of Hierarchy
There’s a prevailing notion that being an adviser equates to more power than being a sub-adviser. It’s easy to see why. Semantically, “adviser” implies leadership while “sub-adviser” sounds secondary. But in practical terms, the distinction does not automatically confer more control.
Control of what, exactly?
To one entrepreneur, it’s about managing the trust. To another, it’s about managing operations. To yet another, it’s about protecting brand equity. Ask two ETF founders and you’ll likely get two different definitions, but a shared concern: “Can someone take my ETF away from me?”
Here’s the reality: unless you manage the trust, the difference between being an adviser or sub-adviser is operational, not hierarchical. In both cases, you are subject to removal in extreme circumstances like breach of contract. And in both cases, your economics, your profits, are secured through a platform services agreement.
What is different is the scope of responsibilities, costs, and risks. Understanding the operational models helps clarify what path best suits your goals.
Three Operational Paths to Launching an ETF
1. Build and Manage the Trust: Maximum Control, Maximum Cost
If your vision is complete independence, running your ETF top to bottom, you’ll need to build your own proprietary trust and infrastructure. That includes forming a board, managing vendors, establishing compliance systems, and securing insurance. Expect a minimum of $200,000 in startup costs and $350,000 annually in ongoing expenses.
The upside? Full control. You manage the trust, nominate trustees for the board, and retain all the economics. The downside? It’s time-consuming, expensive, and operationally intense. You’ll likely miss out on scale-based cost efficiencies and may struggle with institutional distribution without broader platform support.
2. Be an Adviser Using a Series Trust: Autonomy Without Trust Management
In this model, you serve as the adviser but operate under someone else’s series trust. This cuts down on trust-related costs, bringing your annual expenses closer to $190,000. However, you’re still responsible for heavy lifting: board reporting, trading, vendor management, capital markets coordination, and compliance systems.
You retain your brand and economics, but without management of the trust, you have less control over trustee nominations and appointments, and the operational burden remains high. Depending on the trust structure, scale benefits may be limited.
3. Be a Sub-Adviser Through a White-Label Platform: Focused and Scalable
This is where Tidal Financial Group can be a valuable partner. As a white-label platform, Tidal manages the trust and delivers end-to-end ETF infrastructure, fund administration, compliance, trading execution, and board management, so you can focus on what you do best: strategy and asset gathering.
You’ll still invest around $240,000 annually, but you gain the opportunity for operational leverage, lower marginal costs, and faster speed-to-market. Your potential profits are preserved through a platform agreement, and you benefit from Tidal’s institutional relationships and operational experience.
Understanding the Sub-Adviser Role
There are two distinct sub-adviser types:
- Active Sub-Advisors: These are the strategists and brand leaders, typically the public face of the fund.
- Execution Sub-Advisors: These handle the operational nuts and bolts of managing an ETF, such as portfolio management, trading, the creation/redemption process, as well as capital markets functions.
The Real Differentiator is Platform Agreements, Not Titles
Taking a step back, the difference between these models doesn’t lie in job titles. It lies in the contracts, the platform service agreements that define your rights, responsibilities, economics, and protections.
Control comes from legal structure and ownership of IP, not necessarily from being listed as “adviser” or “sub-adviser.” And if the contract isn’t ironclad, the title won’t matter.
Define, Choose, and Partner Wisely
The ETF launch process is not one-size-fits-all.
Whether you want to manage the trust, act solely as an adviser, or leverage the scalability of a white-label platform, the key is to define what matters most, control, economics, speed, or simplicity, and align your operational model accordingly.
In light of this, partnering with an experienced provider like Tidal Financial Group allows issuers to mitigate operational headaches while retaining their strategic voice. With over 225 ETFs launched, +$40 billion in AUM, and comprehensive services from trust management to trading execution, Tidal offers a more efficient and scalable path to ETF success.
For those looking to turn their ETF vision into reality without losing control or profitability, Tidal provides the infrastructure, support, and trust to help make that journey seamless.