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Direct Indexing Needs Explanation
Matt Ober
October 23, 2023
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I have had a lot of conversations lately post the Frec launch. Many people are interested in learning more. Many people are not educated about direct indexing. But when they find out the benefits, they are very intrigued.
Customization- who doesn't want the ability to put their money in the market, follow an index, but have the ability to do some customization? Maybe you own a stock heavily in your brokerage account. Maybe you really hate big oil companies. Whatever it is, you can customize it.
Tax benefits- nobody likes paying taxes. Nobody really understands all the tax laws and different ways to reduce paying taxes. One thing everyone likes is finding out there is a way to pay less taxes. Tax loss harvesting is just one of the benefits of direct indexing. Frec has some great resources on this topic, this being one of them.
One thing that we need with direct indexing is education. We need to explain tax loss harvesting and carry forward. We need to explain how you can track an index or an ETF, but have the flexibility of customization. We need to explain that all this can be done with low fees. Most of all we need to explain that this type of tool or product exists and make the masses aware. Typically this type of offering is explained and offered by advisors. Not everyone has a financial advisor. So we need to get the word out!
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