America's Best Direct Indexing Buyers Guide 2024 - 22

2024 DIRECT INDEXING BUYERS GUIDE
In a market where advisor fees rise
while product costs decline, direct
indexing offers an opportunity to
highlight your added value. By
reducing product costs, direct
indexing lets you reduce overall
investment expenses for clients
while maintaining a high level of
sophistication in their portfolios.
Whether you use direct indexes as
a core strategy or in a core-satellite
allocation, you can significantly reduce
asset management costs without
sacrificing value.
Ultimately, this is both a growth
strategy and a client retention tool.
Once you successfully implement
direct indexing for a few clients, you
can expand it to your entire book
of business. This also allows you to
market your services to prospects who
are currently working with advisors
who can't or won't offer this service.
Time to Assemble Your Team
Now that you understand how direct
indexing works, you're likely thinking
about how to integrate this approach
into your current client platform.
Fortunately, there are many wellestablished
vendors who can help
fill in these gaps or even provide a
complete solution.
Keep in mind that each vendor is
unique. They've evolved to address
specific market challenges, with some
specializing in particular areas of wealth
management while leaving other
functions untouched. Some excel at
helping advisors serve various client
segments, addressing diverse needs
effectively.
Then there are technology-driven
companies that focus on automating
and delivering your insights. Some
even provide the technology behind
other custom indexing platforms.
Then, there are direct indexing
giants whose strength lies in tailoring
individual client situations into
customized investment solutions
without burdening the advisors they
work with.
These providers may not extend your
expertise too far, but their world-class
capabilities will expand your capacity.
They allow you to scale up, handling
more clients, and scale down, offering
personalized outcomes to clients who
may have previously only qualified for
generic, one-size-fits-all solutions.
While we've discussed the process, it's
important to also focus on the index
itself. Suitability is always key, but with
over 5,000 market-slicing methods
available, selecting the right benchmark
is crucial. Sometimes, the S&P 500
won't meet a client's specific needs.
It's that simple!
The value of an index comes from how
accurately it represents the target asset
class. For successful direct indexing,
advisors should prioritize an index with
a rules-based, transparent, and easily
understood construction. You may not
22
be familiar with all the benchmarks yet,
but you'll likely be impressed by their
precision and purpose.
One way or another, there are
companies that offer a comprehensive
package that can take your practice
and your client outcomes forward.
Choose your partner, complete the
puzzle, and you're ready to move into
the future with confidence.
America's Best Direct Indexing Buyers Guide 2024

Table of Contents for the Digital Edition of America's Best Direct Indexing Buyers Guide 2024
