LPL Financial Holdings, a leading wealth management firm, has announced that it will be introducing direct indexing capabilities. This new offering will allow financial advisors to customize stock indexes specifically tailored to their clients’ needs.
According to Rob Pettman, Executive Vice President of Wealth Management Solutions at LPL, financial advisors are constantly seeking ways to enhance client outcomes and provide personalized investment solutions. He states, “Investors want the ability to customize their investment strategy in order to achieve a range of goals, including reducing overall tax burden and/or avoiding a particular sector or security.”
Direct indexing has gained significant interest among advisors and investors due to its potential benefits for tax-loss harvesting and ESG (Environmental, Social, and Governance) investing. Additionally, it can be advantageous for investors with sizable concentrated stock positions.
LPL’s direct indexing service, available through their Modern Wealth Portfolios program, offers more personalized outcomes for investors. The minimum requirement to access this service will be $100,000. The company will provide a selection of large-cap, small- and mid-cap, and international equity options for customization.
Although LPL is not the first firm to offer direct indexing capabilities, their extensive size sets them apart. As the largest independent broker-dealer in the nation, LPL has nearly 22,000 financial advisors and oversees $1.24 trillion in assets.
At the recent annual conference for financial professionals in San Diego, LPL announced the launch of this new capability. To develop the tool, LPL utilized industry-leading indexes from MSCI, an investment data and analytics company.
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