BERWYN, PA — Envestnet has announced the pioneering introduction of its Direct Indexing (DI) solution to the Canadian wealth management market, marking the first time such a tool, designed to be model-traded and held within a Unified Managed Account (UMA), is available in Canada. This innovation underscores a significant shift toward greater portfolio customization, flexibility, and tax efficiency for Canadian advisors and their clients.
Direct Indexing offers a personalized approach to portfolio management, enabling investors to align their investments with individual financial goals while optimizing for potential tax benefits. According to research from Cerulli Associates, Direct Indexing has become the fastest-growing segment in managed accounts, with projected annualized growth of 12.3% from 2022 to 2026, surpassing ETFs and mutual funds. Globally, Direct Indexing assets are expected to reach $800 billion by 2026, driven by rising demand for tailored investment solutions and advisor adoption of this strategy.
Through its QRG Capital Management, Inc. unit, Envestnet is now offering a cutting-edge DI solution within a UMA framework. This development allows Canadian advisors to incorporate model-traded DI strategies into diversified, multi-asset portfolios. The UMA approach enables seamless portfolio integration, providing clients with efficiency and personalized service on an adaptable platform.
Brandon Thomas, Co-Chief Investment Officer for Envestnet, highlighted the company’s leadership in the space. “Since 2013, QRG has been a pioneer in delivering model-based direct indexing solutions in a UMA format, and with strong growth in this area, we’ve become the largest broadly distributed SMA manager on the Envestnet platform. We are thrilled to have, once again, set the standard by developing and managing these strategies, specifically for Canadian advisors and their clients,” said Thomas.
Redefining the Advisor Experience
The DI solution represents Envestnet’s broader initiative to grow its presence in Canada while providing advisors with advanced tools to address evolving client requirements. Michael Featherman, Head of Investment Consulting & Distribution at Envestnet, emphasized the importance of this launch, stating, “This is the first time in the Canadian market that Direct Indexing has been integrated into a Unified Managed Account structure, giving advisors a powerful tool to offer true portfolio personalization at scale. We believe this innovation will redefine the way Canadian investors access tailored wealth management solutions, bringing them greater control, efficiency, and flexibility.”
By delivering tools that empower advisors to provide deeply customized, tax-optimized portfolios, Envestnet is poised to meet growing demand for personalization in wealth management. Direct Indexing and UMAs, when combined, offer a comprehensive solution to deliver after-tax return optimization and enhance the value delivered to clients.
With this launch, Envestnet solidifies its leadership in innovative investment solutions, elevating the standards for portfolio management in the Canadian market.
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