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The proliferation of direct indexing continues as Smartleaf Asset Management’s sub-advisory service is now available on Fidelity’s Institutional Separate Account Network. The service enables advisors to outsource the rebalancing and trading of customized and tax-optimized portfolios. Smartleaf’s offering offers the ability to add direct indexing by making a selection on a pull-down menu. Advisors have the choice of specifying their own allocations and products or selecting allocations and models from third-party providers. The announcement is no surprise as the demand for direct indexing has skyrocketed among advisors. This has been especially true with tax management, risk customization, and impact investing, three areas where direct indexing has seen the greatest implementation. One drawback of direct indexing is that you have to actively manage a direct index portfolio to implement constraints and get tax savings. This is where SmartLeaf is looking to fill the void.


Finsum: With the demand for direct indexing skyrocketing, Smartleaf’s sub-advisory service launched on Fidelity’s Institutional Separate Account Network, providing advisors with an automated direct index solution.

If a new bill in the Senate gets passed at some point, ESG investing in retirement plans may become a thing of the past. On July 26th, Senator Mike Braun of Indiana introduced The Maximize Americans’ Retirement Security Act (S. 4613), legislation that would clarify that the fiduciary duty of plan administrators is to select and maintain investments based solely on “pecuniary” financial factors. Based on the legislation, pecuniary factors are defined as any factors that a fiduciary prudently determines are expected to have a material effect on the risk or return of an investment. The bill, which was co-sponsored by seven other GOP senators, would curb the Department of Labor’s efforts to make it easier for plan fiduciaries to consider ESG factors when selecting plan investments. ESG investing has become a hot political topic as of late, and its recent underperformance during the bear market has only further added to the scrutiny.


Finsum: With ESG becoming a hot political issue, GOP Senators introduced a bill that would curb the DOL’s efforts to make it easier for plan fiduciaries to consider ESG factors in plan investments. 

Potomac Fund Management’s model portfolios are reaching a larger audience as its strategies are now available on the FMAX and Amplify platforms. FMAX stands for Fidelity’s Managed Account Xchange, which is an investment platform that connects advisors to portfolio construction solutions. Amplify is another wealth management platform that provides advisors with portfolio and client solutions. This follows a recent announcement by the company that its strategies had launched on the Orion Portfolio Solutions platform. The demand for strategy diversification has skyrocketed as advisors deal with the current bear market. The downturn has led advisors to embrace multiple strategies to build and preserve wealth for their clients. Potomac’s strategies are designed to “win by losing less” which may help financial advisors build portfolios to help protect against market risk. The company’s suite of model portfolios allows advisors to match the right strategy to each investor’s needs.


Finsum: Potomac Fund Management’s model portfolios, which help advisors diversify against market risk, are now available on more platforms.

Friday, 12 August 2022 04:10

Rumbles growing for direct indexing

The rumble for a trend called direct indexing seems to be accelerating, as a burgeoning number of investors are displaying a demand for specialized portfolios, according to markettradingessentials.com.

The upshot: eschewing ownership of a mutual or exchange traded fund, direct indexing’s flashing the wallet on stocks of an index, the site continued. The idea’s to hit to hit paydirt on, for example, tax efficiency, diversification or values-based investing.

“It says a lot that these large fund providers are leaning into direct indexing,” said Adam Grealish, head of investments at Altruist, an advisor platform with a direct indexing product.

So, in light of the ascension of direct indexing, investors might be asking, pre tell, how to build a portfolio in which this strategy’s incorporated, according to corporate.vanguard.com.

Well, presto, investors can cull ways to meet that goal through a framework available in Personalized indexing: A portfolio construction plan, a Vanguard research paper recently published. 

“Our research represents a sensible starting point for potential direct indexing investors who want to include this strategy in their portfolios,” said Vanguard senior investment strategist Kevin Khang, Ph.D., one of the paper’s authors.

Friday, 12 August 2022 04:08

Interest in ESGs taking a hit?

With apparent eroding client interest, ESGs might be losing some of their bang, according to thinkadvisor.com. In the past several months, 31% of advisors reported taking questions about ESG or socially responsible investing from clients. That’s down from 39% who indicated as much last year and in 2020.

Thirty four percent of advisors were found to tap or recommend these strategies to clients this year,  according to the survey. While that’s an uptick of 2 percentage points from 2021, it receded from a high of 38% in 2020.

Investmentnews.com reported in June that, in recent years, while a burgeoning percentage of financial advisors folded ESG investments options into their business, more now indicated they intend shore back on suggesting such investments, according to a survey.


While financial advisor use or recommendation of environmental, social and governance or ESG investing strategies have moved consistently along over the past four years, according to prnewswire.com. However, during the next  12 months, it could slip in use, according to the 2022 Trends in Investing Survey, conducted by the Journal of Financial Planning and the Financial Planning Association, as provided to prnewswire.com by the Financial Planning Association.

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