The number of providers in the European ETF market is likely to expand dramatically in the next five years as the continent catches up with the market developments in the US, suggested Hector McNeil from white-label provider HANetf.

McNeil, who writes a regular column for ETF Stream, was speaking at a panel looking at the entrepreneurial side of the ETF market during this week's Inside ETFs event which took place in London.

"I think there will be 50 new providers in the space within the next five years," he said.

"In the US, ETFs have been asset manager-led. In the UK, though, everybody is a supermarket provider. There have been perceived barriers to entry but I think they will collapse."

Marc Knowles, ETF lead for management consulting at at KPMG, agreed that there was likely to be more product available in the years ahead, primarily in the smart beta field. "We've had a number of conversations with issuers about differentiation," he said. "People are looking at ways they can enter the market but they can't do that in the broad beta space."

Recent new entrants in the European ETF space include JP Morgan, which launched with a pair of actively managed ETFs, and Franklin Templeton which came to market with four LibertyQ smart beta funds and has already added a multi-factor emerging markets fund to the range.

Knowles mentioned that there are "significant tailwinds" which help explain the both the continued ETF inflows and the attractiveness of the market for asset managers. "It's RDR and Mifid II and the general move towards fee-based fiduciary investment management."

For the first time ever, the growth rates within the European sector are outstripping the US, McNeil noted. "This is a boat which is leaving the harbour and the traditional investment managers are now looking to get on board that boat."

He added that this will likely lead to more wrappers rather than platforms. "They have the strategies and they can repose them," he said.

Henry Cobbe, head of research at Elston Consulting, said that although we have yet to see such names as Aberdeen and Schroders, it was the host of "boring innovations" to the infrastructure of ETFs that had had to happen first. These are now largely in place, he added.

For Knowles there is room for different market entry strategies. "Asset managers know they need to have an ETF option, but they don't necessarily need to make a big splash. They can take their time and ease their way in."

The panel was in agreement that the growth when it comes will be more skewed towards smart beta and potentially active ETFs rather than the plain vanilla beta products. "Active ETFs will be the biggest of all," said McNeil. "That will be the next stage in ETFs."

"People are scared to go against iShares, but you need to look at things from a different perspective."

One interesting move in the UK is coming from IG Group, McNeil noted, which launched a Smart Portfolio service earlier this year. ETF Stream features comments from Ian Peacock, the head of UK and Ireland, in our current Big Interview piece and McNeil says the launch is an interesting move. "It is also no surprise that you have seen that company do that," he added. "It is very good at converting clients."

He added, though, that so far with other robo-advisers, there was an evident lack of traction as yet. "I think there will be room for be more revolutionary apps in the future," he said. Pointing to the apps now available in the fractional saving market he added that "something like Snapchat will add ETFs to their platform."