Direct Indexing is an investment strategy designed to replicate the market exposure of a specific index by holding a representative selection of the securities within that index. Separately Managed Accounts are a common structure used to implement Direct Indexing, providing investors with the ability to directly purchase and own individual securities. This approach gives a high level of customization tailored to each investor’s unique and specific investment needs, such as tax management, value-based considerations, and custom screens.
Direct indexing is not just a buzzword; it’s a game-changer in the world of wealth management, and we want to ensure you’re at the forefront. Whether you’re a seasoned investing professional or just beginning your journey, we offer a wealth of knowledge to confidently navigate the direct indexing landscape.
Direct Indexing short video series
Explore the power of Direct Indexing through our comprehensive video series. From the basics to advanced strategies, these videos are designed to help you understand how to harness the full potential of Direct Indexing to achieve your investment goals.
Introduction to Direct Indexing
Strategic Applications of Direct Indexing
Direct Indexing articles
- Direct indexing decoded: A must-know for financial advisors maneuvering through tax season
- Staying ahead of the game with direct indexing in financial advisory
- Strategic tax planning: Kickstart the year with direct indexing
- Strategic giving: How direct indexing could enhance charitable contributions
- 6 steps to tax-efficient onboarding of clients with direct indexing
- How to use Direct Indexing to offset taxes on a future financial windfall
- Concentrated stock positions: The consequence of forgetting to spring clean a portfolio
- What should you look for in a direct indexing provider? 10 things to consider
- How to attract high net-worth investors with direct indexing
- Top 5 reasons to use Direct Indexing
- Top 5 benefits of direct indexing: Our view
- Separately Managed Accounts with Direct Indexing: A tax planning tool for baby boomers
- Personalized Managed Accounts: Aligning to your client’s values on their terms
- Direct Indexing: An easy way to tax-loss harvest all year long
- What do you do with a concentrated stock position?
- Direct indexing: An efficient way to turn tax losses into tax assets
- Direct Indexing: What exactly is it and why are so many talking about it?
Ready to explore direct indexing investment strategies?
PERSONALIZED MANAGED ACCOUNTS
The next level of customization in Separately Managed Accounts
Download our PMA Direct Indexing Solutions overview
Our direct indexing solutions are carefully crafted to suit an investor's needs and provide the next level of customization in separately managed accounts.
Frequently Asked Questions for Direct Indexing
Personalized Indexing is frequently used interchangeably with Direct Indexing, which creates a portfolio with a representative selection of the securities in a given index in a separately managed account. Personalized Indexing, as well as Direct Indexing incorporates client-directed customization, such as tax management, Environmental, value-based considerations, and custom screens.
Direct Indexing can help solve investment challenges such as the need to manage taxes or the requirement to impose certain restrictions.
Direct Indexing in Separately Managed Accounts allows for more tax efficiency because investors can selectively harvest tax losses from individual securities, then use those tax losses to offset gains in other areas of their portfolio. In commingled product options, tax loss harvesting depends on overall market performance and the losses are owned by the fund or ETF.
Direct Indexing offers greater personalization compared to mutual funds and ETFs by allowing investors to directly own individual securities tailored to their specific investment preferences and goals.
Direct Indexing can allow investors to offset capital gains from selling a concentrated stock position with capital losses generated from other securities held in the portfolio, helping minimize the tax implications.
Investors may hold an emotional attachment to the stock or may face potential tax implications, as the original cost of the shares could be significantly lower than the current price, leading to a large capital gain and subsequent tax bill.
Direct Indexing’s ability to utilize individual losses on stocks not only helps manage current tax liabilities but may also provide the flexibility to offset future taxable events, such as the sale of a business, property, or stocks and bonds.
Planning for financial windfalls by utilizing Direct Index SMAs and generating tax losses over time helps the investor build tax “assets” that can be used in the future to offset the tax liability of the windfall. This could provide significant tax savings for the investor and potentially better overall outcomes.