Direct Indexing

Direct indexing builds a portfolio from individual securities rather than only using pooled funds.

This creates a customizable implementation layer where tax management, exclusion rules, and mandate constraints can be applied at the account level.

It is a control framework, not a product, and it is typically used only when diagnostics show that higher implementation precision is warranted.

• improves control over tax timing and realization policy.
• reduces structural mismatch between mandate and actual holdings.
• supports clearer governance versus opaque pooled implementations.

• when diagnostics show persistent tax drag in taxable accounts.
• when concentration or overlap requires precise risk editing.
• when household policy constraints cannot be met with off-the-shelf funds.

Direct indexing is an implementation path selected after structural evidence is established. Findings from Fee Leakage, Concentration Risk, and Tax Drag are used to determine whether this solution layer is appropriate.

Ongoing validation runs through Portfolio Monitoring and Risk Alerts.