Direct indexing now traditional however there are still barriers to extensive adoption, FTSE Russell study discovers

Direct indexing is delighting in higher adoption in the wealth management market, according to FTSE Russell’s newest study, which likewise flags the barriers in the course of the growing financial investment method.

Based on the actions of 400 U.S.-based monetary consultants, the research study discovered that 83% of participants are either presently utilizing or strategy to utilize direct indexing, up from 76% in in 2015’s study. Some 83% of consultants in this year’s study likewise stated that direct indexing is specifically helpful for high net worth customers, concurring that it had actually assisted them grow/strengthen their high net worth customer service.

Tax- loss harvesting is the primary advantage of direct indexing, according to 2 thirds (66%) of participants to the 3rd yearly study, which has actually been released to accompany the Future Proof Festival beginning in Huntington Beach,Calif Monday.

” I believe we lastly can conclude that direct indexing has actually struck the mainstream, which’s from the viewpoint of the variety of customers that consultants are utilizing direct indexing for, in addition to the possessions in which consultants are designating to direct indexing,” Adam Gebler, head of wealth, Americas, at FTSE Russell informed InvestmentNews at Future Proof Tuesday.

Certainly, there are barriers to adoption. While the research study discovered that absence of customer need decreased as a viewed difficulty to 35% in 2026 from 45% in 2025, the difficulty of informing customers was mentioned by 33% of consultants in 2026, down somewhat from 34% in 2015. Advisors’ own understanding and understanding of direct indexing was highlighted as a difficulty by 31% of participants, up from 27% in 2025.

Costs were likewise recognized as an obstacle by 29% of this year’s study participants, up from 19% in 2015. Tech is another headache– majority (59%) of participants stated that incorporating direct indexing with their tech stack is a difficulty, up from 52% in 2015. Set versus this background, independent broker dealers deal with the best combination difficulty, with 65% reporting troubles. Even 51% of wirehouse and standard channel consultants, a sector that can harness scale and a central facilities, stated they discover combination tough.

The obstacles around direct indexing mostly fall under 2 classifications– education, and innovation, according to FTSERussell “There is a basic understanding that both the innovation combination, suggesting how do we plug direct indexing into our existing tech stack and workflows, is tough,” Gebler informed InvestmentNews.

Direct indexing has actually definitely been delighting in development in the last few years– possessions held under the method represented $1.2 trillion at the end of 2025, according to Cerulli Associates, which anticipates direct indexing to grow faster than ETFs, standard different accounts, and shared funds over the next 5 years.