LPL Unveils Direct Indexing Service for Financial Advisors

LPL Financial announced the availability of direct indexing within the firm’s Model Wealth Portfolios unified managed account program (MWP), becoming the latest wealth management firm to provide financial advisors with the ability to customize stock indexes for individual clients.

The capabilities aim to “make trading investment strategies more tax efficient while also creating personalized outcomes for clients” and are delivered through separately-managed-accounts utilizing MSCI indices, LPL said.

The tailored SMAs will have minimums of $100,000 and will include small-, mid- and large-cap as well as international equity options.

“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,” said Rob Pettman, LPL Financial EVP, Wealth Management Solutions.

LPL is not the only broker-dealer to offer advisors direct indexing. In May, Cetera Financial Group announced it had added a portfolio customization tool to its My Advice Architect advisory platform, including direct and custom indexing capabilities.

Custodians have also been adding direct indexing capabilities. Charles Schwab launched Schwab Personalized Indexing in April 2022 after much fanfare, while Fidelity Investments followed suit later that year.

LPL’s direct indexing capabilities will be available this month, the firm said.