- 83% of current users say direct indexing helps grow and strengthen high-net-worth relationships
- 86% of advisors want to expand their direct indexing knowledge, underscoring a major education opportunity
- 78% still report implementation friction, with the greatest challenges among independent broker-dealers and RIAs
- Majority of advisors believe AI will accelerate growth of direct indexing
FTSE Russell, LSEG’s global index provider, today announces the findings from its third annual direct indexing survey. The results, based on the responses of 400 US-based financial advisors, suggest direct indexing is now a mainstream capability for wealth management, although implementation, integration and education remain key barriers to broader adoption.
Adam Gebler, Head of Wealth, Americas, at FTSE Russell, said:
“As advisors’ familiarity with direct indexing increases, we are seeing a corresponding rise in adoption across virtually all measures over the last year. Future growth depends less on the benefits of direct indexing and more on solving educational and technology challenges.
“Advisors are looking for practical support that can help them understand the investment case, select appropriate benchmarks and translate the benefits of personalisation and tax management into client conversations. As a global multi-asset index provider, FTSE Russell can support that effort with curated research and educational resources - including videos and webinars - that help providers equip advisors with the knowledge and confidence to implement direct indexing successfully.”
Direct indexing adoption continues to accelerate
Well over half of advisors (57%) report being extremely or very familiar with direct indexing, up from 49% last year. Usage has increased from 33% to 41%, allocations increased from 13% to 17% of advisor AUM, and the average percentage of clients per advisor increased by 25% (from 16% to 20%), indicating that direct indexing is becoming more deeply embedded in advisor practices.
As expected, tax benefits topped perceived benefits with over four in 10 current users (42%) mentioning tax efficiency/tax-loss harvesting as a reason they expect to increase their use of direct indexing over the next 12 months. Most advisors (83%) are currently using or plan to use direct indexing in the next 12 months, up from 76% in 2025. Current and planned usage by channel jumped significantly, with wirehouse/traditional firms rising from 47% to 63% and the RIA channel doubling from 15% in 2025 to 30% this year.
There is also broad confidence (83% of advisors) that advancements in AI will accelerate the growth of direct indexing, up from 81% in 2025.
Implementation challenges limit adoption
Overall, 78% of advisors still report some friction in implementation. More than half (59%) say integrating direct indexing into existing technology stacks is challenging, up from 52% last year. Independent broker-dealers face the greatest integration challenge, with 65% reporting difficulties compared to 51% at wirehouse/traditional firms.
Despite growing momentum, only 15% of advisors say implementation is “very easy,” up slightly from 13% in 2025. However, perceptions rise sharply with experience: 45% of advisors who are “extremely familiar” with direct indexing say implementation is “very easy.”
Direct indexing is increasingly viewed as a necessity in modern wealth management
An increasing majority of advisors agree that direct indexing is essential to remain competitive, rising from 52% in 2025 to 57%, which was strongest among wirehouse/traditional channels at 69%. Most advisors (83%) also agree that direct indexing has helped them grow and strengthen high-net-worth relationships.
Perceived benefits for wealth clients beyond tax optimisation reinforce this view. Most advisors (82%) believe direct indexing offers personalisation not available through traditional ETFs and mutual funds, up slightly from 2025 (79%). Advisors with larger practices ($500M+ AUM) were more likely to strongly agree with this view. Further, nearly nine in 10 (87%) agree that direct indexing is a valuable tool for coordinating investment and tax management across multiple accounts within a client household.
Younger, larger-practice advisors leading direct indexing movement
More than three in four (77%) advisors under 45 are extremely or very familiar with direct indexing, compared to 57% of advisors ages 45–54 and 49% of those 55+. They are also more likely to see it as strategically important, with 65% agreeing direct indexing is essential to remain competitive in wealth management, versus 54% of advisors ages 45–54 and 55% of those 55+.
Over two thirds (68%) of advisors at practices with $500M+ AUM are extremely or very familiar with direct indexing, versus 53% among smaller practices. They are more likely to view it as essential to stay competitive (61% vs. 55%), more confident discussing it with clients (78% vs. 64%), and, among current users, more likely to plan to increase usage over the next 12 months (77% vs. 61%).
Education gap offers significant opportunity for direct indexing providers and partners
The majority of advisors (86%) expressed interest in building their knowledge of direct indexing, with 30% indicating they are “very interested”, underscoring an opportunity for providers. Interest in direct indexing education is highest among younger advisors (45%) and wirehouse/traditional channels (44%).
Over two thirds (68%) indicated they are at least “somewhat” confident talking to clients about direct indexing. Confidence is higher among younger advisors (82%), larger practices (78%) and wirehouse/traditional channels (80%).
Cost emerging as a significant barrier
Barriers to adoption are evolving, with “cost” rising cited by 29% of advisors up from just 19% in 2025. Conversely, “lack of client demand,” which was the top response (45%) in 2025, fell notably to 35% in 2026. “Complexity makes educating clients difficult” (33%) and “my understanding and knowledge of direct indexing” (31%) remained among the top challenges.
Notes to editors:
The 2026 FTSE Russell Direct Indexing Survey is an online quantitative survey of 400 US-based financial advisors from a mix of channels (wirehouse/traditional, independent broker-dealer and RIA) who have some familiarity with direct indexing. The respondents are aged 25+ with $20M+ AUM. 58% of respondents have $200M+ AUM with an average AUM across the total sample of $578M. The survey responses were collected between May 19th to June 19th, 2026. The survey was conducted by independent research firm 8 Acre Perspective.
Contacts
About FTSE Russell, an LSEG business
FTSE Russell, LSEG’s global index leader, provides innovative benchmarking, analytics and data solutions for investors worldwide. FTSE Russell calculates thousands of indexes that measure and benchmark markets and asset classes in more than 70 countries, covering 98% of the investable market globally.
FTSE Russell index expertise and products are used extensively by institutional and retail investors globally. Approximately $20 trillion is benchmarked to FTSE Russell indexes. Leading asset owners, asset managers, ETF providers and investment banks choose FTSE Russell indexes to benchmark their investment performance and create ETFs, structured products and index-based derivatives.
A core set of universal principles guides FTSE Russell index design and management: a transparent rules-based methodology is informed by independent committees of leading market participants. FTSE Russell is focused on applying the highest industry standards in index design and governance and embraces the IOSCO Principles. FTSE Russell is also focused on index innovation and customer partnerships as it seeks to enhance the breadth, depth and reach of its offering.
For more information, visit FTSE Russell.
© 2026 London Stock Exchange Group plc and its applicable group undertakings (“LSEG”). LSEG includes (1) FTSE International Limited (“FTSE”), (2) Frank Russell Company (“Russell”), (3) FTSE Global Debt Capital Markets Inc. “FTSE Canada”, (4) FTSE Fixed Income LLC (“FTSE FI”), (5) FTSE (Beijing) Consulting Limited (“WOFE”), FTSE EU SAS ("FTSE EU"). All rights reserved.
FTSE Russell® is a trading name of FTSE, Russell, FTSE Canada, FTSE FI, WOFE, FTSE EU and other LSEG entities providing LSEG Benchmark and Index services. “FTSE®”, “Russell®”, “FTSE Russell®”, “FTSE4Good®”, “ICB®”, “Refinitiv”, “WMR™” “FR™” and all other trademarks and service marks used herein (whether registered or unregistered) are trademarks and/or service marks owned or licensed by the applicable member of LSEG or their respective licensors.
FTSE International Limited is authorised as a Benchmark Administrator and regulated in the United Kingdom (UK) by the Financial Conduct Authority ("FCA") according to the UK Benchmark Regulation, FCA Reference Number 796803. FTSE EU SAS is authorised as Benchmark Administrator and regulated in the European Union (EU) by the Autorité des Marches Financiers (“AMF”) according to the EU Benchmark Regulation.
All information is provided for information purposes only. All information and data contained in this publication is obtained by LSEG, from sources believed by it to be accurate and reliable. Because of the possibility of human and mechanical inaccuracy as well as other factors, however, such information and data is provided "as is" without warranty of any kind. No member of LSEG nor their respective directors, officers, employees, partners or licensors make any claim, prediction, warranty or representation whatsoever, expressly or impliedly, either as to the accuracy, timeliness, completeness, merchantability of any information or LSEG Products, or of results to be obtained from the use of LSEG products, including but not limited to indices, rates, data and analytics, or the fitness or suitability of the LSEG products for any particular purpose to which they might be put. The user of the information assumes the entire risk of any use it may make or permit to be made of the information.
No responsibility or liability can be accepted by any member of LSEG nor their respective directors, officers, employees, partners or licensors for (a) any loss or damage in whole or in part caused by, resulting from, or relating to any inaccuracy (negligent or otherwise) or other circumstance involved in procuring, collecting, compiling, interpreting, analysing, editing, transcribing, transmitting, communicating or delivering any such information or data or from use of this document or links to this document or (b) any direct, indirect, special, consequential or incidental damages whatsoever, even if any member of LSEG is advised in advance of the possibility of such damages, resulting from the use of, or inability to use, such information.
No member of LSEG nor their respective directors, officers, employees, partners or licensors provide investment advice and nothing in this document should be taken as constituting financial or investment advice. No member of LSEG nor their respective directors, officers, employees, partners or licensors make any representation regarding the advisability of investing in any asset or whether such investment creates any legal or compliance risks for the investor. A decision to invest in any such asset should not be made in reliance on any information herein. Indices and rates cannot be invested in directly. Inclusion of an asset in an index or rate is not a recommendation to buy, sell or hold that asset nor confirmation that any particular investor may lawfully buy, sell or hold the asset or an index or rate containing the asset. The general information contained in this publication should not be acted upon without obtaining specific legal, tax, and investment advice from a licensed professional.