Direct Indexing Channel

If there's a backlash brewing, we can't see it. It's all about tax optimization and personalization for its own sake. However, the question is which advisory channels are embracing the direct index approach fastest . . . and where institutional challenges will slow adoption.

Some people are saying direct indexing is nothing but expensive hype designed to push HNW efficiencies on portfolios too small to really support or justify anything but the random walk. We beg to differ. With a direct indexing guide on the horizon, we're obviously convinced that this is the future. But what do YOU think?

When buying a house, your real estate agent is key. They need to know your preferences and budget and other considerations so they can show you targeted properties that meet your requirements. Picking a direct index partner is a similar scenario.

Although its ubiquity and availability to all sorts of investors is a recent development, direct indexing has been around for many years albeit only for high-net-worth investors. In a recent SmartAsset interview of Vestmark’s SVP of Direct Indexing, Dave Gordon, he discussed what financial advisors need to know, and why wealth management firms are so bullish on the trend.

"Among wealth advisors, product and performance-oriented value propositions are in decline. This poses a fundamental challenge to the asset management industry," Jerry Michael notes. This will help reverse that trend and let advisors get back to work.

“These branded experiences underscore Schwab’s ability to meet the specific needs of our wealthier clients, but we are equally committed to ensuring that every client at Schwab receives a great experience, from those just getting started to those building wealth,” said Craig. “We are proud to offer a range of services and capabilities for investors at every stage of their investing journey with a focus on delivering low costs and great value, products and experiences that make investing easy and accessible, and exceptional client service.”