Financial Technology

Direct Indexing & The Financial Technology Opportunity

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Jared F. Baucom

Jared F. Baucom

Managing Director, Global Sales & Marketing

Is Direct Indexing the Next Frontier for Fintech?

As fractional shares and the disappearance of brokerage commissions have removed barriers to personalized portfolio solutions, direct indexing has come to the fore.

Technology is essential to offering a successful personalized index. ​Asset managers need to build a console that allows the advisor to construct portfolios in consultation with their clients and communicate this information to the portfolio manager. Solutions that can automate, customize, and scale across thousands of accounts are essential to the personalization aspects of direct indexing.​

Asset Managers’ Assessment of the Opportunity, 2020

Source: Cerulli Associates

Big players are acquiring fintech capabilities and new separately managed accounts (SMAs) are hitting the market. Is direct indexing a tax-efficient way for high-net-worth (HNW) investors to invest or a broader entrance to mass customization of wealth management? There are many important pieces of technology needed to automate, customize, and scale trading across thousands of portfolios—is now the time to explore opportunities in this space?

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Contact us to discuss how we can help you assess the total addressable market.

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Meet Our Team

Subject Matter Experts

Tom O'Shea, CFA

Tom O'Shea, CFA

Director

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Tom O'Shea, CFA

Tom O'Shea, CFA

Director

Tom has over 20 years of experience in the financial services industry. Prior to joining Cerulli, Tom was an Investment Product Manager at Fidelity’s Global Asset Allocation Division, where he played a leadership role in the ongoing development of Fidelity Personalized Portfolios, Fidelity’s Unified Managed Account (UMA) for retail customers. He also led the investment managers in creating the Breckenridge Municipal Portfolio, Fidelity’s first separate account for consumers managed by a third party. Before working on the retail side of Fidelity, Tom built and led the team that developed Fidelity’s Separate Account Network for registered investment advisors (RIAs), and his group partnered with a third party wrap sponsor to create Managed Account Resources, a UMA platform for RIAs.

Tom began his career in high tech, working in sales, business development, and product management at a number of software firms, including Lotus Development Corporation.

Fill Biography here.

Daniil Shapiro, CFA

Daniil Shapiro, CFA

Associate Director

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Daniil Shapiro, CFA

Daniil Shapiro, CFA

Associate Director

Daniil is part of Cerulli’s Product Development practice, where he works on the identification, analysis, and reporting of asset management industry trends with a focus on exchange-traded funds (ETFs) and alternative investments.

Prior to joining Cerulli Associates, Daniil was part of the Product Management and Business Intelligence teams with the MainStay Funds, part of New York Life Investment Management. At MainStay, Daniil supported sales efforts via fund and ETF competitive analysis, product research, and development of marketing materials, as well as performance reporting. Before New York Life, Daniil was part of the risk management practice at Accenture, and held risk and compliance roles at HSBC’s investment bank.

Full biography here.

Brendan Powers, CFA

Brendan Powers, CFA

Associate Director

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Brendan Powers, CFA

Brendan Powers, CFA

Associate Director

Brendan is a member of Cerulli’s Product Development practice, which focuses on trends related to asset managers’ product development and management functions. This broadly includes assessing the opportunity for product development, evaluating emerging product trends, and understanding distribution and product positioning for investment products across retail and institutional channels.

Prior to joining Cerulli, Brendan worked as a Senior Client Associate at Eaton Vance Management, focusing primarily on the firm’s exchange funds.

Full biography here.

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Strategic Consulting

Understand where to allocate resources to achieve your objectives. We can help you determine which initiatives are likely to be successful and those that may not achieve the desired effect. In an increasingly competitive market, our objectivity and experience can help you to advance your firm’s unique strengths.


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