Page 16 - Investment Advisor September 2021

INDUSTRY INSIGHTS

a ripple effect on the rest of the industry. and trading application, ASTRO, inte- Many have predicted that technol-
This means direct indexing is likely here grated into its Eclipse trading platform ogy innovation would be the death
to stay. a few years ago. ASTRO is one of the knell of the investment management
Other major deals in the asset man- first technology tools available directly industry — and they have pretty much
agement space have seen similar large to advisors to get them into the direct been correct these past decades. In
firms acquiring this new technology, indexing game, along with Advent’s this case, however, technological
including J.P. Morgan with its acquisi- Black Diamond rebalancer. Look for innovation in direct indexing capa-
tion of OpenInvest, BlackRock buying other tech platforms to enhance their bilities has the potential to stave off
Aperio, and Fidelity inking an equity direct indexing capabilities at lightning that extinction, at least until the next
partnership with Ethic. Of course, all speed to avoid getting left behind. innovation comes along. Until then,
of this started with Morgan Stanley’s Asset managers and advisors with asset managers and advisors providing
purchase of Eaton Vance last year; Eaton these new powerful tools can literally investment management services now
Vance had the foresight to acquire The do the portfolio rebalancing that once have a new message to once again dif-
direct indexing pioneer Parametric back took days in just minutes, dramati- ferentiate themselves as truly value-
in 2003. Look for any boutique asset cally increasing the benefits they can added providers.
manager with the words “direct” and deliver to clients. In a sea of sameness,
“indexing” on their website to be next firms that can deliver a direct index- Timothy D. Welsh, CFP, is president, CEO and
up for acquisition. ing approach now have the chance founder of Nexus Strategy LLC, a consulting
On the technology front, Orion to feel good about themselves, while firm to the wealth management industry. He can
has been ahead of the curve with the justifying higher basis points for value be reached at [email protected] or on
launch of its innovative rebalancing delivered. Twitter @NexusStrategy.

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14 INVESTMENT ADVISOR SEPTEMBER 2021 | ThinkAdvisor.com