#Canada #Envestnet #Direct Indexing #Berwyn, PA #Canadian Wealth

Envestnet's Innovative Approach to Direct Indexing in Canada

Envestnet is setting a new benchmark in the Canadian wealth management landscape by unveiling its groundbreaking Direct Indexing (DI) solution—marking the first time this innovative approach is being modeled and traded within a Unified Managed Account (UMA) in Canada. This development signifies a considerable advancement in the personalization of portfolio management, granting greater flexibility, customization, and tax efficiency for financial advisors and their clients across the nation.

Direct Indexing has emerged as a pivotal component of modern wealth management strategies. It allows individual investors to personalize their portfolios extensively, enhancing tax efficiency while aligning investment exposure with personal financial objectives. According to recent findings from Cerulli Associates, direct indexing is rapidly becoming the dominant force within managed accounts, with a forecasted growth rate of 12.3% annually from 2022 to 2026. This acceleration has the potential to outpace the growth of traditional mutual funds and ETFs, with direct indexing assets anticipated to reach $800 billion by 2026. Notably, over 60% of financial advisors surveyed indicated a willingness to adopt direct indexing as a viable alternative to these conventional investment vehicles.

While the statistics observed were chiefly drawn from the United States, analysts expect similar trends in the Canadian market, where investor expectations are progressively shifting towards more personalized and tax-efficient investment solutions. Envestnet's introduction of this cutting-edge Direct Indexing solution is a strategic move that aligns seamlessly with these evolving demands.

Through its asset management branch, QRG Capital Management, Inc., Envestnet is incorporating an innovative DI solution into UMA structures. This allows Canadian financial advisors to blend model-traded direct indexing strategies effortlessly into a comprehensive, multi-asset investment portfolio. Co-Chief Investment Officer Brandon Thomas emphasized the significance of this initiative, expressing excitement over their history of pioneering model-based direct indexing solutions within the UMA format since 2013. With continuous growth in this domain, QRG has established itself as the largest broadly distributed Separately Managed Account (SMA) manager on the Envestnet platform.

Moreover, this launch forms part of Envestnet's comprehensive strategy to bolster its platform capabilities, thereby enhancing the overall experience for advisors and their clients in Canada. Michael Featherman, Head of Investment Consulting Distribution for Envestnet, stated, "As we continue to deepen our presence in Canada, our goal is to provide advisors with tools to meet the evolving needs of their clients. This marks the first time in Canada that Direct Indexing has been integrated into a Unified Managed Account structure, offering advisors an invaluable tool for delivering true portfolio personalization at scale."

Ultimately, this innovation is set to redefine the manner in which Canadian investors access curated wealth management solutions, providing them with unparalleled control, efficiency, and flexibility in their investment strategies. Envestnet's commitment to leading the evolution of financial advice is clear, as it continues to support the wealth management industry with an ecosystem of integrated technology, advanced insights, and comprehensive solutions backed by exceptional service and support. In its 25 years of operation, Envestnet has become a trusted partner for more than one-third of all financial advisors, serving some of the largest banks, wealth management, and brokerage firms in North America.

For further insights on how Envestnet is revolutionizing the financial advice sector, including the latest updates, visit Envestnet's website and follow them on LinkedIn and X (@Envestnet_). This trailblazing launch underscores Envestnet's dedication to enhancing wealth management in Canada, ensuring clients benefit from personalized and efficient investment strategies.