June 26, 2022
At this point, you either know the basic approach behind direct indexing or you don't. If you're unsure, Adhesion has put together a very short video that lays out the basics in a matter of seconds.
It's worth your time. But then the video continues into slightly more advanced territory.
Direct Indexes: Supercharge with Adhesion from Adhesion Wealth on Vimeo.
Once you're emulating an index with an optimized portfolio of individual stocks, why not emulate multiple indices using the same method . . . and then balance taxable implications across the top-level allocations? At that level, the tax impact stacks up faster. But to keep track of all the trades, you probably need to be running the money in a unified managed account (UMA) structure. Otherwise, you're just running a bunch of SMAs. That can be more efficient than ETFs from a tax perspective . . . but it still isn't tapping the ultimate potential of what direct indexing can actually do for your clients.
