Overview
FTSE Russell spoke to over 400 financial advisors about how they are using direct indexing to attract high net worth, and ultra-high net worth clients. We learned how they are addressing tax challenges as well as solving unique personalisation needs of their most sophisticated clients.
Advisors signal strong direct indexing opportunity, especially among wealthy clients
Most advisors say that they intend to increase use of direct indexing, although client education and implementation remain a challenge.
Key takeaways
- Most advisors plan to step up direct indexing (DI) in the next 12 months. Those under 45 see it as key for remaining competitive. According to our survey, they see the greatest opportunity coming from wealthy clients[1]
- Tax management is DI’s greatest benefit, followed by its potential as a tool for reducing portfolio concentration. Artificial intelligence (AI) is serving as a catalyst speeding adoption, as it can automate implementation of tax efficiencies
- Education remains a challenge, especially explaining DI to clients. Additionally, some advisors perceive implementation as a difficulty
- FTSE Russell offers recognised index solutions for DI, including the Russell 3000 index that provides full representation of US equities. We’d welcome an opportunity to discuss our findings in more detail
[1] Conducted by 8 Acre Perspective, the survey solicited input from 402 advisors between March 7 and March 24, 2025. For more information, see about our research at the end of the report.
