FTSE Russell Survey Finds Direct Indexing Is Becoming a Core Wealth Management Capability as Adoption, AI Expectations and Advisor Education Demand Rise

FTSE Russell Survey Finds Direct Indexing Is Becoming a Core Wealth Management Capability as Adoption, AI Expectations and Advisor Education Demand Rise

(IN BRIEF) FTSE Russell’s third annual Direct Indexing Survey shows that direct indexing is becoming a mainstream capability across US wealth management, with adoption, allocations and advisor familiarity all increasing year over year. Among 400 US-based financial advisors surveyed, 57% now describe themselves as extremely or very familiar with direct indexing, while usage has risen from 33% to 41% and average allocations from 13% to 17% of advisor AUM. Some 83% of advisors currently use or plan to use direct indexing within the next 12 months, and 83% of current users say it has helped strengthen high-net-worth client relationships. However, 78% still report implementation friction and 59% find technology integration challenging. Education is another major opportunity, with 86% wanting to increase their knowledge, while cost is becoming a more prominent barrier, cited by 29% compared with 19% in 2025. Younger advisors and larger practices lead in familiarity and confidence, and 83% of respondents believe AI will accelerate direct indexing growth, reinforcing its increasingly strategic role in personalized wealth management.

(PRESS RELEASE) LONDON, 10-Sep-2026 — /EuropaWire/ — FTSE Russell, LSEG’s global index provider, has published the findings of its third annual Direct Indexing Survey, showing that direct indexing is becoming increasingly embedded in US wealth management as advisor familiarity, usage and client allocations continue to rise.

Based on responses from 400 US-based financial advisors, the survey found that 83% of current users say direct indexing has helped them grow and strengthen relationships with high-net-worth clients, while 86% of advisors want to increase their knowledge of the approach.

At the same time, implementation remains a significant obstacle. Seventy-eight percent of advisors report some degree of friction, with technology integration proving especially difficult for independent broker-dealers and registered investment advisors.

The survey also indicates growing expectations that artificial intelligence will accelerate adoption, with 83% of advisors believing AI advancements will support further growth in direct indexing.

Familiarity and usage continue to increase

FTSE Russell found that advisor familiarity with direct indexing has risen substantially over the past year.

The proportion of advisors describing themselves as extremely or very familiar with direct indexing increased to 57% from 49% in 2025.

Actual usage also rose, with 41% of advisors now using direct indexing, compared with 33% a year earlier.

Average allocations to direct indexing increased from 13% to 17% of advisor assets under management, while the average proportion of clients using the approach rose by 25%, from 16% to 20%.

FTSE Russell said these trends suggest direct indexing is moving beyond a specialist offering and becoming more deeply integrated into mainstream advisory practices.

83% of advisors currently use or plan to use direct indexing

Looking ahead, 83% of advisors are either currently using direct indexing or plan to use it within the next 12 months, up from 76% in 2025.

Growth was particularly strong across distribution channels.

Among wirehouse and traditional firms, current and planned usage rose from 47% to 63%.

The RIA channel doubled from 15% in 2025 to 30% in 2026, indicating rapidly expanding interest among independent advisory practices.

Tax management remains one of the strongest drivers of adoption. Among current users, 42% cited tax efficiency or tax-loss harvesting as a reason they expect to increase their use of direct indexing during the next year.

Direct indexing increasingly seen as essential for competitiveness

The survey found that a growing proportion of advisors regard direct indexing as important to remaining competitive in modern wealth management.

The share agreeing that direct indexing is essential to competitiveness increased from 52% in 2025 to 57% in 2026.

The view was strongest among wirehouse and traditional firms, where 69% agreed that direct indexing is becoming essential.

FTSE Russell also found that 83% of advisors believe direct indexing has helped grow and strengthen high-net-worth client relationships, highlighting the perceived commercial value of personalized portfolio construction.

Personalisation extends beyond tax optimisation

Advisors increasingly see direct indexing as offering benefits beyond tax management.

Eighty-two percent said direct indexing provides a degree of personalisation that traditional ETFs and mutual funds cannot offer, up from 79% in 2025.

Advisors working at larger practices with $500 million or more in assets under management were more likely to strongly agree with this assessment.

In addition, 87% of advisors said direct indexing is a valuable tool for coordinating investment and tax management across multiple accounts within a client household.

FTSE Russell said these findings reinforce the role of direct indexing as a broader portfolio-management capability rather than solely a tax optimization strategy.

Technology integration remains a major challenge

Despite rising adoption, implementation difficulties remain widespread.

Overall, 78% of advisors report some degree of friction when implementing direct indexing.

More than half, 59%, said integrating direct indexing into existing technology stacks is challenging, up from 52% in 2025.

The challenge is most pronounced among independent broker-dealers, where 65% report technology integration difficulties, compared with 51% among wirehouse and traditional firms.

Only 15% of advisors currently describe implementation as “very easy,” although this represents a modest increase from 13% in 2025.

Experience significantly affects perceptions. Among advisors who consider themselves extremely familiar with direct indexing, 45% describe implementation as very easy.

Adam Gebler says education and technology will determine next phase of growth

Adam Gebler, Head of Wealth, Americas, at FTSE Russell, said growing familiarity with direct indexing is being accompanied by higher adoption across most measures.

He said the next phase of growth will depend less on convincing advisors of the benefits and more on resolving education and technology challenges.

Gebler said advisors need practical support to understand the investment case, select appropriate benchmarks and explain the advantages of personalization and tax management to clients.

He added that FTSE Russell can support providers and advisors through curated research and educational resources, including videos and webinars designed to build confidence around implementation.

Younger advisors are leading adoption

The survey found a pronounced generational difference in familiarity with direct indexing.

Among advisors aged under 45, 77% are extremely or very familiar with the approach.

That compares with 57% among advisors aged 45 to 54 and 49% among those aged 55 and older.

Younger advisors are also more likely to consider direct indexing strategically important.

Approximately 65% of advisors under 45 agreed that direct indexing is essential to remain competitive in wealth management, compared with 54% of those aged 45–54 and 55% of advisors aged 55 and above.

Larger practices show higher confidence and adoption

Firm size also plays a significant role.

Among advisors at practices managing $500 million or more in AUM, 68% are extremely or very familiar with direct indexing, compared with 53% at smaller practices.

Larger-practice advisors were also more likely to view direct indexing as essential to competitiveness, at 61% compared with 55% among smaller practices.

They reported greater confidence discussing direct indexing with clients, at 78% versus 64%, and current users at larger practices were more likely to plan increased usage over the next year, at 77% versus 61%.

Education gap represents major opportunity for providers

Interest in direct indexing education remains high, with 86% of advisors expressing interest in expanding their knowledge.

Of those surveyed, 30% said they are very interested in further education.

Interest was particularly strong among younger advisors, at 45%, and among wirehouse and traditional firms, at 44%.

Overall, 68% of advisors said they are at least somewhat confident discussing direct indexing with clients.

Confidence was considerably higher among younger advisors at 82%, larger practices at 78%, and wirehouse and traditional channels at 80%.

FTSE Russell said these findings point to a significant opportunity for index providers, platform providers and wealth management firms to invest in training and advisor enablement.

Cost becomes more important as lack of client demand declines

The barriers to adoption are also changing.

The proportion of advisors citing cost as an obstacle increased to 29% in 2026 from 19% in 2025.

By contrast, lack of client demand, which was the leading obstacle in 2025 at 45%, declined to 35% this year.

Other significant challenges include the difficulty of educating clients about a complex product, cited by 33%, and advisors’ own understanding and knowledge of direct indexing, cited by 31%.

The shift suggests that as awareness and client interest rise, practical issues around economics, implementation and education are becoming more important constraints.

Advisors expect AI to accelerate direct indexing growth

Artificial intelligence is emerging as another important factor in expectations for the market.

Eighty-three percent of advisors believe advances in AI will accelerate the growth of direct indexing, up from 81% in 2025.

FTSE Russell’s findings suggest advisors increasingly expect AI to support areas such as portfolio personalization, implementation, tax management and operational scalability.

The survey therefore points to a convergence between direct indexing, wealth technology and AI as firms seek to deliver more customized investment solutions efficiently.

Survey covers 400 US financial advisors

The 2026 FTSE Russell Direct Indexing Survey was conducted online by independent research firm 8 Acre Perspective.

It surveyed 400 US-based financial advisors across wirehouse/traditional firms, independent broker-dealers and RIAs, all of whom had at least some familiarity with direct indexing.

Respondents were aged 25 or older and managed at least $20 million in assets under management.

Approximately 58% managed $200 million or more, while the average AUM across the full sample was $578 million.

Responses were collected between 19 May and 19 June 2026.

Notes to editors:

The 2026 FTSE Russell Direct Indexing Survey is an online quantitative survey of 400 US-based financial advisors from a mix of channels (wirehouse/traditional, independent broker-dealer and RIA) who have some familiarity with direct indexing. The respondents are aged 25+ with $20M+ AUM. 58% of respondents have $200M+ AUM with an average AUM across the total sample of $578M. The survey responses were collected between May 19th to June 19th, 2026. The survey was conducted by independent research firm 8 Acre Perspective.

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