#etf Exchange-traded funds "have come a long way," the advisor says. Here's how to use it in your portfolio: Experts say that whether you're a novice or an experienced investor, exchange-traded funds and ETFs are portfolio options, depending on your goals and risk tolerance.

ETFs, like mutual funds, are shells of individual assets such as stocks and bonds. However, many investors are encouraged to switch because many ETFs offer better tax efficiency and lower expense ratios than mutual funds. "ETFs have come a long way in the last 15 to 20 years," says Barry Glassman, a certified financial planner and founder and president of Glassman Wealth Services in McLean, Virginia.

Investors sold more than $900 billion from mutual funds and invested about $600 billion in ETFs in 2022, according to Morningstar data. The net difference was the largest ever.

As change continues, we spoke to CNBC's FA Council experts to find out how their clients are using ETFs in their portfolios.

Tax saving effect is the “biggest attraction”

When you invest in a brokerage account, capital gains and dividends are taxed annually. This is different from his pre-tax 401(k) account or individual retirement account, where taxes are deferred until you withdraw the money. "The most attractive feature of ETFs is that most do not distribute capital gains at the end of the year," Glassman said.