Driven by lower costs and increased client demand, direct indexing has seen significant growth in assets under management (AUM) in the United States, increasing from approximately $100 billion in 2015 to approximately $350 billion USD in 2020. Advanced technology, low trading fees, and the rise of fractional shares have lowered the high costs traditionally associated with direct indexing. In response to this growth, leading US wealth and asset managers have been busy over the last 18 months acquiring direct indexing capabilities.
Direct indexing provides a new opportunity for wealth managers to offset fee erosion and provide clients a differentiated offering. Direct indexing enables greater control and customization, and tax optimization to the investors.
As the interest in direct indexing continues to grow, Canadian wealth managers can capitalize on the trend to:
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Sandeep Mukherjee
Director, Consulting
Ferishta Sahebzada
Senior Consultant, Consulting
Shaun Goffenberg
Consultant, Consulting