Advisors and Clients Not Sold on Direct Indexing Yet

While direct index may be a hot industry topic, not all advisors are buying in. In fact, most clients dont even know what direct indexing is. Based on comments from a panel of advisors and tech executives at the WealthManagement.com Industry Awards earlier this month, clients arent asking for direct indexing and most have never heard of the term. While financial giants such as Goldman Sachs, Fidelity, Vanguard, Pershing, Schwab, and Franklin Templeton are acquiring firms and building out direct index offerings, the strategy has not made its way into client and advisor discussions. Megan Meade, CEO of The Pacific Financial Group told WealthManagement.com, Theyre just not that sophisticated of investors. They dont have the assets for that. Nor do they need that level of tax efficiency. Adding to the uncertainty are tech executives who are also unsure about the current value of direct indexing. J. Helen Yang, founder and CEO of Andes Wealth Technologies told the publication, I am very skeptical about direct indexing as a way to offer personalization.