April 6, 2023 – In the last 18 to 24 months, the market has seen a lot of activity and discussion around direct indexing. Does the direct indexing opportunity live up to the hype? The answer is both yes and no. Direct indexing is poised for growth; however, the immediate indexing marketplace is not always well understood. While direct indexing has been around for decades targeting and benefiting affluent clients, technology advancements such as digitalization and fractional share trading enable this solution to expand, scale, and move down-market to support a broad array of clients and investment.

This Impact Report addresses the development of effective, next-generation direct indexing solutions and provides an understanding of key drivers, benefits, expectations, capabilities required, target markets and challenges, and the timetable for growth. This research is based on in-depth interviews with 21 senior executives from asset management firms, broker-dealers/wealth management providers, fintech/investment platforms, clearing and custody providers, and financial advisors. This report also leverages Aite-Novarica Group’s 2021 Advisor Survey, secondary research sources, and public regulatory filings.

Clients of Aite-Novarica Group’s Wealth Management service can download this report.

This report mentions Apreio, Columbia, Envestnet, Eaton Vance/Parametric, Fidelity, Morgan Stanley, Northern Trust, and Wealthfront.