Direct indexing is a powerful investment strategy that can offer tax benefits over equivalent index mutual funds and ETFs, but its advanced nature is difficult to explain and creates a barrier for most investors. While it could benefit a broad audience, the challenge lies in simplifying the concept for those without a deep investment background. Companies offering direct indexing face the difficulty of crafting succinct messaging that resonates with the average investor. 📈

Fintech companies like Frec tend to focus on the benefits and don't try to explain the internal mechanics to the general public (see https://lnkd.in/girfV4KN ). But most investors will want to know how the black box works before sending money to a company, and -- without this understanding -- investors can also inadvertently make tax mistakes by trading in other accounts.

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