New Innovation Brings Model-Traded Direct Indexing to Unified Managed Accounts for the First Time in Canadian Wealth Management
Envestnet is expanding its commitment to the Canadian wealth management market with the launch of a Direct Indexing (DI) solution—the first of its kind in Canada to be model-traded and held within a Unified Managed Account (UMA). This innovation represents a major milestone in personalized portfolio management, offering greater flexibility, customization, and tax efficiency for Canadian advisors and their clients.
Direct Indexing has become a cornerstone of modern wealth management, allowing investors to personalize portfolios, optimize tax efficiency, and customize exposure to align with their financial goals. According to Cerulli Associates1, direct indexing is the fastest-growing segment in managed accounts, with assets expected to grow at a 12.3% compound annual growth rate (CAGR) from 2022 to 2026, outpacing ETFs and mutual funds. By 2026, Direct Indexing assets are projected to reach $800 billion, driven by increasing advisor adoption and investor demand for personalization and tax efficiency. More than 60% of advisors surveyed by Cerulli indicated that they are considering direct indexing as an alternative to traditional ETFs and mutual funds. While these figures are based on a study conducted in the U.S., we anticipate a similar trajectory in the Canadian market as investor expectations evolve and demand for personalized, tax-efficient solutions like Direct Indexing continues to rise.
With this launch, Envestnet, through its QRG Capital Management, Inc. asset management unit, is introducing an innovative DI solution within a UMA structure, enabling Canadian advisors to seamlessly integrate model-traded direct indexing strategies into a holistic, multi-asset portfolio.
“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 platform2,” said Brandon Thomas, Co-Chief Investment Officer for Envestnet. “We are thrilled to have, once again, set the standard by developing and managing these strategies, specifically for Canadian advisors and their clients.”
This announcement is part of a broader initiative by Envestnet to expand its platform capabilities and enhance the advisor and client experiences in Canada.
“As we continue to deepen our presence in Canada, our goal is to provide advisors with tools to meet the evolving needs of their clients,” said Michael Featherman, Head of Investment Consulting & Distribution for Envestnet. “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.”
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