LPL Financial, a US-based investment and business solutions provider, has made direct indexing available within the company’s model wealth portfolios (MWP) unified managed account programme.
According to LPL Financial, direct indexing can aid in making trading investment strategies more tax efficient. Besides, it helps in producing individualised outcomes for customers which benefits both advisors and investors.
The new offering will be accessible via new custom indexed separately managed account (SMA) solutions in MWP.
It will offer a foundation for powerful tax and portfolio management capabilities, said the firm.
LPL Financial wealth management solutions executive vice president Rob Pettman said: “Financial advisors are always looking to help improve client outcomes and deliver personalised investment solutions.
“Investors want the ability to customise their investment strategy in order to achieve a range of goals, including reducing overall tax burden and/or avoiding a particular sector or security.”
The custom index SMAs, designed by LPL Research by leveraging indexes from MSCI, will have minimums of $100,000.
Furthermore, they comprise large-cap, small and mid-cap, and international equity options, enabling advisors to develop solid core portfolios tailored to the specific needs of the client.
MSCI index head and chief product officer Remy Briand said: “MSCI is delighted to collaborate with LPL Financial as they leverage customized versions of the MSCI USA and EAFE ADR indexes as the foundation to deliver investment solutions that meet the growing needs of financial advisors and their clients.’’
The new direct indexing strategy has been made available this month.
LPL Financial’s direct indexing is expected to offer advisors with more customisation and control. It will include the option to personalise automatically recurring tax harvesting strategies distinctive to each of their clients’ MWP portfolios to help to enhance the tax outcomes of their clients.
