Wealth Management
Direct indexing has emerged as a compelling investment approach, offering personalized portfolios and tax advantages. According to experts at Goldman Sachs, this strategy is gaining traction as investors seek tailored solutions.
The industry has expanded rapidly, with direct indexing assets now totaling nearly $800 billion—more than fivefold growth in recent years. Financial advisors are increasingly integrating direct indexing into portfolios to enhance tax efficiency and customization.
Unlike ETFs, which track broad indices, direct indexing enables investors to own individual stocks, optimizing tax-loss harvesting opportunities. As adoption rises, technology plays a crucial role in managing the complexity of these highly customized accounts.
Finsum: The technology gains have made a huge impact in the world of finance but particularly with new strategies such as direct indexing where it can have a substantial impact on the cost structure.
Now is an opportune moment to optimize your investments for tax efficiency, as upcoming policy changes could significantly impact financial planning. With tax rates set to rise and transfer tax exemptions shrinking in 2026, proactive strategies can help safeguard wealth.
One key approach is ensuring that assets are held in tax-advantaged accounts, maximizing the benefits of tax deferral or exemption. Additionally, tax-loss harvesting and careful portfolio rebalancing can mitigate liabilities while maintaining investment goals.
Charitable giving through donor-advised funds or qualified charitable distributions also presents tax-efficient opportunities. Finally, sophisticated tools like GRATs and strategic liquidity management can help navigate tax burdens while preserving long-term wealth.
Finsum: These are three wonderful tips to improve the efficiency of portfolios, and its good to start educating clients on the benefits of tax alpha.
Managed accounts have evolved beyond simple investment tools to become a key retirement income solution within defined contribution plans. While their availability has increased significantly over the years, participant adoption remains low, with only 7% utilizing these accounts despite widespread access.
Critics point to ongoing fees as a drawback, though proponents argue that managed accounts provide tailored financial planning, including retirement timing and Social Security optimization.
Some newer offerings even incorporate annuities or structured withdrawal features, turning managed accounts into a direct retirement paycheck solution. This customization makes them an attractive option for plan sponsors considering alternatives to traditional target-date funds.
Finsum: As the marketplace continues to adapt, managed accounts are gaining traction as a more personalized and flexible retirement planning tool.
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Structured annuity sales soared to a record $62.9 billion in 2024, marking a 39.6% increase from the previous year as investors sought downside protection with upside potential. The fourth quarter alone saw $17.2 billion in structured annuity sales, continuing the product’s rapid ascent.
Indexed annuities also experienced strong growth, hitting $130 billion for the year despite a quarter-over-quarter dip. Meanwhile, variable annuities rebounded sharply, posting a 25.4% annual increase to $61.3 billion, driven by stock market gains and growing advisor demand.
Income annuities, a staple for retirees and income-focused investors, reached $14.9 billion in total sales, with New York Life maintaining its dominant market share. While some fixed annuity segments faced headwinds, the broader annuity market remained robust, reflecting investors’ shifting priorities in an evolving economic landscape.
Finsum: With a large boomers currently in the midst of retirement, we could see more demand for annuities from the largest generation.
Food trends in 2025 continue to evolve, with diners seeking immersive experiences that go beyond just a meal, especially as inflation encourages them to prioritize restaurants offering unique events or entertainment.
Global flavors have become an expectation rather than a novelty, as Asian and international influences seamlessly integrate into American cuisine, expanding culinary possibilities for chefs and consumers alike. Spice levels are rising on menus, with diners embracing bolder flavors, following the chili crisp craze and the growing popularity of Nashville hot dishes.
Sandwiches remain a social media favorite, with chefs elevating them through inventive ingredients and international inspirations, proving their staying power in the dining world. Meanwhile, mocktails continue to thrive, with house-made syrups and fresh ingredients transforming them into sophisticated, health-conscious alternatives to traditional cocktails.
Finsum: Also locally sourced ingredients are more valued than ever, with farm-to-table offerings shaping restaurant menus even as they incorporate global flavors as people search for sustainable alternatives.
Financial advisors are rapidly integrating generative AI into their workflows, with 76% reporting immediate benefits, particularly in efficiency and client engagement. Concerns about AI replacing human advisors have diminished, with only 8% viewing it as a threat, down from 21% a year ago.
While firms are increasingly formalizing AI policies—jumping to 82% from 47% in 2024—advisors remain selective in their use, favoring AI for analytics and marketing rather than personalized financial planning.
Many see technology as a competitive advantage, with 57% acquiring clients from competitors with outdated systems. However, despite AI’s rapid adoption, 65% of advisors believe their tech stacks still need improvement.
Finsum: As AI-driven tools continue to reshape wealth management, firms that strategically implement these advancements stand to gain the most.