Are you finding that clients are no longer satisfied with one-size-fits-all investment solutions? If so, you have good company with many other financial professionals.
As client expectations increasingly shift toward greater personalization among even mass affluent investors, direct indexing has emerged as a powerful approach to portfolio construction that’s flexible, tax-efficient, and highly customizable.
In this blog, we’ll explore how Alphathena’s AI-powered platform transforms the way you build and manage your clients’ portfolios with direct indexing.
What Is Direct Indexing?
At its core, direct indexing allows clients to hold the individual securities of an index rather than owning the index through a mutual fund or ETF. This approach opens the door to personalized strategies that reflect specific goals, values, and tax situations.
With direct indexing, you can:
- Exclude certain companies or sectors
- Apply ESG or values-based screens
- Harvest tax losses more efficiently
- Adjust exposures for personal or household circumstances
This level of customization was once reserved for ultra-high-net-worth clients. Now, platforms like Alphathena are helping bring it into everyday advisory practices.
Rethinking Portfolio Construction with Alphathena
Alphathena’s platform makes portfolio construction with direct indexing more accessible, scalable, and intuitive.
Instead of relying on rigid models or manually building custom portfolios, Alphathena leverages artificial intelligence to deliver tailored solutions based on client needs and preferences.
Imagine being able to select from more than 1,200 indexes and ETFs to replicate, then apply over 40 different factors, including ESG screens and sector tilts. If your client wants to avoid energy companies or overweight technology, it’s easy to make those changes.
Alphathena handles the heavy lifting on the back-end, managing rebalancing, tracking error, and ongoing adjustments without requiring additional hands-on time.
Tax Efficiency at the Core
One of the key advantages of direct indexing over other approaches to investment strategy is the built-in ability to optimize for after-tax returns. Alphathena’s platform was created with tax efficiency at the center.
Alphathena’s platform monitors portfolios daily for tax-loss harvesting opportunities, not only at the account level but across entire households. This level of analysis allows for coordinated tax management that complies with wash sale rules and reinvests proceeds in appropriate substitute securities.
For financial professionals, the automated ability to monitor and harvest losses translates into tangible value for your clients and a streamlined process that doesn’t require complex spreadsheets or third-party tools.
Seamless Integration with Advisor Workflows
Alphathena is designed to work with your existing infrastructure.
The platform is custodian-agnostic, so you can stay with your preferred custodian and still use the full suite of Alphathena’s tools. The Open API-first architecture means it integrates cleanly with your current tech stack, minimizing disruption and making it easy to incorporate into your practice.
Better Conversations, Deeper Relationships
When portfolios reflect your clients’ values, goals, and tax realities, the quality of your conversations improves. Instead of focusing solely on market performance, those discussions shift toward what matters most to them.
Direct indexing supports more meaningful engagement by delivering transparent, customized strategies that evolve as your client priorities change.
It’s a powerful way to build trust, deepen relationships, and differentiate your services in a competitive landscape.
Ready to Rethink Your Approach?
Portfolio construction doesn’t have to be a tradeoff between personalization and efficiency. Alphathena makes it possible to do both through a platform that empowers you and your clients.
Schedule a tour today to see how Alphathena can support your strategy and ongoing needs in portfolio construction and direct indexing.
