LPL adds direct indexing to its Model Wealth Portfolios program

Financial advisors using LPL Financial’s Model Wealth Portfolios unified account management program will now have access to direct indexing.

The firm announced the enhancement at its flagship Focus 2023 event that ended Monday, and advisors will be able at access the feature through new custom indexed separately managed account solutions.

The addition of direct indexing capabilities gives advisors the potential to make investment strategies more tax efficient and create more personalized outcomes for clients, two things that Rob Pettman, LPL Financial executive vice president of wealth management solutions, said are in demand from advisors and their clients.

“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,” he noted.

The new custom index SMAs, created by LPL Research using MCSI Inc.’s indexes, will have a $100,000 minimum and offer advisors portfolio-building options including large-cap, small- and mid-cap, and international equities.

“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,” said Remy Briind, chief product officer and head of index at MSCI.


Advisors will also be able to focus on personalized tax outcomes thanks to the option to tailor automatically recurring tax-harvesting strategies unique to each client’s portfolio.

“The opportunity to deliver personalized portfolios can help advisors deliver more value to investors,” Pettman added. “Utilizing direct indexing capabilities can also help to attract and retain investors looking for sophisticated and personalized investment advice.”

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