Introduction to Direct Indexing

Are You Direct Indexing? A look beyond mutual funds and ETFs

The financial industry has seen incredible technological innovation in recent years. Despite this innovation, most advisers continue to rely on layers of management rather than leveraging technology for the benefit of their clients.

Direct indexing is an investment methodology that has historically only been available to the ultra-wealthy. Thanks to advances in technology paired with super low commission costs direct indexing is now far more accessible.


What is Direct Indexing?

Direct Indexing is a strategy that seeks to replicate the positions of an index by purchasing the underlying individual equities instead of using an ETF or mutual fund. There are three main advantages to utilizing direct indexing:


1. remove a layer of management, which may reduce costs

2. tailor a portfolio specifically to a specific investors, income and tax situation

3. tax management strategies, such as deferring gains and loss harvesting are far more effective than with funds


In a world where asset management and investment advice have become commoditized, implementation efficiency offers investors a potential advantage - especially in passive, index-based strategies. Direct-indexing eliminates a layer of middle-men reducing costs while providing unique advantages.


Since the inception of WealthFactor I have been providing a holistic investment service to clients for 0.35%. This service has gained the attention of those that prefer to manage their portfolios themselves. I’ve decided to offer my direct-indexing services out to investors comfortable making their own investment decisions but might benefit from the advantages of avoiding funds. I’m offering this limited service set for 0.25% which in many cases is less expensive that the costs of owning a fund.


If you are not using direct indexing or are paying more than .35% all in for your investing reach out to me.


https://www.wealth-factor.com/disclosures-and-disclaimers

Lake Oswego, Oregon

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*Important Disclosures and Disclaimers: No assurances can be made that WealthFactor will be able to achieve its investment objectives or avoid losses. WealthFactor is a Registered Investment Advisor. The information on this website is not intended as tax or legal advice. The information on this website is intended for residents of Oregon. This information is not intended to be personalized and as such should not be construed as a recommendation to buy or sell any security or financial instrument, or to participate in any particular investment strategy. WealthFactor is licensed with the State of Oregon and will seek proper licensing or exemption from licensing before conducting business in any state.  ADV Disclosure documents available upon request.  Click here for additional disclosures.  Click here for definitions.