Issue link: https://resources.envestnet.com/i/1537367
Conclusion Every client is unique, and therefore we like to think of direct indexing capabilities in an individualized way. Instead of positioning direct indexing exclusively as a tax management option, and obsessing over composite level 'tax alpha', we encourage advisors to shift the dialogue with clients to how direct indexing can help them navigate their needs throughout their investment journey. Investment portfolios should be as dynamic as life: clients need cash, add cash, change advisors, make donations, sell businesses, change risk tolerance or capacity, etc., and thoughtful, bespoke tax management and portfolio design should be a part of each of these common transactions. • For individuals that want to go beyond passive, direct indexing can break the link with market cap weighting, incorporating factor tilts or traditional active management. • For clients with unique risk exposures, direct indexing allows for holdings- level customization to insulate them from additional exposure to risks they bear in other areas of their financial lives. • For newly onboarded prospects, or those looking to adjust their approach, direct indexing can allow you to tax efficiently transition a client's portfolio from legacy holdings to their optimal strategy. • For investors that need tax efficient income, but who hold concentrated positions, direct indexing can be paired with options overlay capabilities in effort to generate cash flow without having to sell concentrated stock at a gain. Direct indexing is not a narrow tax management solution – it's a powerful solution that empowers advisors to deliver deeply personalized, tax-aware portfolios that help clients more effectively address the realities of their complex financial lives. Advisors who embrace direct indexing as part of their broader investment capabilities will differentiate themselves and their practices, deepening client relationships by providing portfolios built for clients. In a world where personalization is becoming commonplace and after-tax outcomes are of heightened focus, direct indexing is the solution every forward-thinking advisor should be ready to offer. 20250701-4620699 █████████████████ Ì200009WWIJÎ