America's Best Direct Indexing Buyers Guide 2024 - 35

2024 DIRECT INDEXING BUYERS GUIDE
Smartleaf Asset Management
1 Bowdoin Sq, Fl 10, Boston, MA 02114 * www.smartleafam.com
SMARTLEAF
Jerry Michael
President &
Co-Founder
Direct indexing needs to be as
easy as working with ETFs or
mutual funds. We make this
possible. There is no separate
contract, no separate account
opening, no separate process for
managing cash or asset-class
rebalancing. Just a choice on a
pull-down menu.
And firms need to document the
value of direct indexing-to be
able to show, for most clients,
that they save or defer more
in taxes than they charge in
advisory fees.
Stand-alone direct index SMAs
are not the answer. They are
operationally complex and get in
the way of optimally managing
tax and risk at the portfolio level.
The solution is for investor-facing
advisors to control product
choice and all customization and
tax-management parameters
for the entire portfolio, not just a
sleeve-and delegate day-to-day
management of client portfolios
to an in-house or third-party
specialist. This makes it possible
for wealth management firms
to incorporate direct indexes
into their practice without
any increase in operational
complexity, and, when combined
with fractional shares and
zero-dollar commissions,
offer all investors maximum
customization and optimized tax
management.
Smartleaf Asset Management, LLC (SAM) offers
personalized and tax-optimized rebalancing and
trading sub-advisory services for holistically managing
portfolios and households holding any combination
of direct indexes, actively-managed individual equity
strategies, ETFs and mutual funds. By outsourcing
portfolio management to SAM, you can provide every
client of every size exceptionally high levels of portfolio
personalization and tax management-while spending
zero time reviewing, rebalancing and trading portfolios.
We work directly with leading custodians to access
holdings and manage trading. There is no need for
separate software integrations.
Direct Indexes as Easy as ETFs
SAM makes working with direct indexes as easy
as working with ETFs-a simple choice on a pulldown
menu.
Flexible Open Architecture UMA
SAM supports any combination of ETFs, mutual funds,
direct indexes and actively managed equity strategies.
Use your existing asset allocation and security
models, or leverage our open-architecture model
distribution service to use those from third-parties.
Personalization
Outsourcing does not mean a reduction in
personalization; it means an increase. You can
provide every account with custom product choice,
New business contact:
Bob Leaper, Senior Business Development Executive
Phone: (617) 453-0074
Email: bleaper@SmartleafAM.com
Website: LinkedIn
Brand of direct indexing platform/product:
Smartleaf Asset Management direct indexes and
third-party direct indexes
Platform/product architecture: Open
Total AUM/AUA: $3.5 billion
Year direct indexing platform/product began: 2020
Indexing type: Product and Platform
Distribution strategy: Sub-advisory service is
available on Schwab, Fidelity, Interactive Brokers
and Axos Clearing. Direct indexes are also available
to Smartleaf, Inc. software clients.
Advisor channel served: RIAs, Bank Trusts
Personalization options: Yes
Private labeling: Yes
Number of custom indices available: 17 currently,
tracking S&P®
, Russell®
, MSCI®
and Morningstar®
indexes, plus bespoke direct index options and
more than 200 third-party models
Types of products available: ETFs, Mutual Funds,
Individual Stocks (US and ADR)
Minimum investment requirement: We have
firm minimums but no portfolio minimums. For a
70-stock direct index without fraction shares, we
typically recommend at least $50,000 allocation to
avoid an excessive tracking error.
custom cash management and custom screens for
religious-values, ESG/SRI and restricted securities.
Exceptional Tax Management
Provide every account with year-round, tax-loss
harvesting, short-to-long-term gains deferral,
ongoing gains deferral and tax sensitive transition-
all based on the individual tax rates of each client.
Sophisticated Transition Management
Create tax-optimized transition proposals in real
time that show how you will minimize the disruption
of managing new client portfolios. Incorporate lowbasis
legacy holdings, concentrated holdings and
implement tax or gains budgets.
Documentation of Taxes You Save
Go beyond saying you tax manage accounts. Provide
every client with a custom account-level Estimated
Taxes Saved/Deferred Report that lets you document
in detail the taxes saved or deferred through active
tax management. For most clients, you should be
able to document that you save or defer more in
taxes than you charge in advisory fees.*
Holistic Unified Managed Householding (UMH)
Optimize the management of groups of accounts
to a joint household-level asset allocation, taking
advantage of tax-deferred accounts to minimize taxes
when rebalancing.
Platform compatibility: Schwab, Fidelity,
Interactive Brokers, Axos Clearing, BlackDiamond,
most bank trust platforms
Tax optimization features: Yes
Trade efficiency: Yes
Integration with trade execution or order
management systems: Yes
Integration with trust accounting systems: Yes
Proposal generator availability: Yes
Asset allocation methodologies: User-specified.
Or subscribe to third-party asset allocation models.
Rebalancing features: Yes
Supported custodians: Schwab, Fidelity,
Interactive Brokers, Axos Clearing
Marketing support offered: Yes
Platform's unique selling proposition:
Personalization and Tax Optimization Made Simple
Product/platform's performance tracking &
reporting capabilities: Daily values reporting,
Estimated taxes saved or deferred report; Realtime
transition proposals, real-time feedback on
the risk and tax impact of personalization and
tax management preferences; Daily monitoring,
reporting and tax-optimized control of tracking error
Use Cases: Traditional SMAs and holistically
managed portfolios managed with high levels of
personalization and tax optimization. Direct indexes
as easy to work with as ETFs
Solutions open to the public: No, SAM is a subadvisor
and does not sell directly to the public.
*Expected outcome for most clients. Results depend on many factors, including market movement, fees, product choice, asset allocation, cash activity, client tax rates, and
legacy holdings.
35

https://www.smartleafam.com/ https://www.linkedin.com/in/bobleaper/

America's Best Direct Indexing Buyers Guide 2024

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