America's Best Direct Indexing Buyers Guide 2024 - 8

2024 DIRECT INDEXING BUYERS GUIDE
2024 Wealth Advisor Subscriber Survey
W
hile a slim majority (57%)
of the advisors we polled
this year have adopted
some form of direct index
solution, it's clear that participation was
voluntary and those who know most about
this approach to wealth management are
overrepresented in the numbers. These
are the pioneers.
And they skew a little bigger and a lot more
diverse than the control group. Advisors who say
they're using direct indexing report 43% more
AUM than those who don't.
The popularity of this approach increases with
scale. Focus on advisors in the $500 million
bracket, direct indexing is no longer an exotic
niche looking for mass acceptance. It's already the
mainstream. When you hit $1 billion, fund wraps
get rare.
Adoption goes across all channels. Nearly
everyone from the wirehouses acknowledges
that this is how they run money today, but about
half of all broker-dealer reps (independent and
otherwise) and, perhaps surprisingly, half of the
RIAs are here as well.
The rationale is loud and clear. Direct indexing
automates and outsources the part of the wealth
management platform that can be automated and
outsourced: the portfolio itself.
Retrieving those hours from the work week
creates opportunities to attract new clients (34%),
deepen existing relationships (35%), focus on
planning (34%) and even reach for better end-toend
investment performance (28%). You'll notice
that these numbers add up to a lot more than
100%. " All of the above " was the most popular
answer.
What do these early adopters want now? Better
tax management tools are the overwhelming
favorite, with more than half (53%) of our people
saying existing platforms have room to improve.
ESG isn't a huge factor for most, but look at the
number of advisors eager to apply these solutions
to tax-advantaged retirement accounts.
Does your firm use a direct
index solution?
10%
20%
30%
40%
50%
60%
70%
0%
YES
NO
Why do you use your current
direct index solution?
I wanted to focus my time on
attracting new clients
Meeting with existing clients and
focusing on client retention
Operational cost savings and
gained efficiency
Focus more on holistic
financial planning
Limit risk of being sued for poor
investment performance
Gain better investment
performance for my clients
34.04%
35.58%
33.33%
34.04%
7.88%
28.27%
What do you wish your current
direct index solution would do?
12.66%
ESG
investing
12.1%
Biblically
responsible
investing
27.99%
401(k)
solutions
36.15%
Income
investing
53.16%
Tax-loss
harvesting
17.3%
Gains
budgeting
8
America's Best Direct Indexing Buyers Guide 2024

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