Managing portfolios composed of individual stocks offers a tailored and strategic approach that appeals to certain wealth management and advisory firms. Unlike using funds or models, single-stock allocations allow for greater alignment with client preferences, enabling the inclusion of emotionally significant holdings without compromising diversification. 

These portfolios can be structured with 25-40 companies, providing exposure across sectors and industries while remaining adaptable to market trends and avoiding areas at risk of disruption. 

Tax management is another advantage, with techniques like pairing gains with losses, gradual position reductions, and leveraging donor-advised or exchange funds to address large embedded gains effectively. Direct indexing also adds value, helping maximize tax-loss harvesting while accommodating individual stock holdings

Finsum: We prefer direct indexing when considering a strategy such as this, because it can become too unwieldy as your client base grows.