And those same financial services companies will end up managing these in the end game for crypto. This is just early adopter syndrome. Risk and reward, freedom and responsibility.
There are already Bitcoin ETFs and other stock-market tradable products in many jurisdictions (not US though). These are very straightforward for casual user, I don't see how it would be any more insecure than buying for example Gold ETF.
It's harder to permanently steal gold from an institution than crypto.
Bitcoin (let alone a Bitcoin ETF) doesn't scratch the surface of all of the financial services that can be implemented with Smart Contracts. I agree though that is certainly going to be a piece of the overall landscape. Beyond financial services are things like Smart Trusts.