Erkko Etula, CEO and Co-Founder of Brooklyn Investment Group, joined Julie Cooling, Founder and CEO of RIA Channel, to discuss direct indexing across multiple vehicles and asset classes.
Brooklyn Investment Group is a custom direct indexing platform that allows investments in equities, fixed income, ETFs, and mutual funds. Advisors are concerned about the time that they spend managing the liquid portion of client portfolios when they would rather be spending time with clients discussing alternative investments, trust and estate planning.
Custom direct indexing allows tracking of available index while allowing personalization of the holdings to account for exclusions and concentrated positions. Adding municipal fixed-income holdings adds to the tax benefits of a direct indexing program. Brooklyn’s advisor portal assists advisors with rebalancing, cash outflows, new investments, and tax-efficient trading. Enhanced direct indexing works with long-short portfolios, such as 130-30, which adds 30% long and 30% short positions to a traditional direct indexing portfolio. Enhanced direct indexing increases the capital available to create tax loss harvesting opportunities for investors with highly concentrated positions. Tax losses generated through direct indexing can be used to liquidate concentrated positions over time while paying little to no taxes on the large capital gains.
Advisors can access Brooklyn directly or through a partner such as Nuveen, which uses Brooklyn’s technology to power their direct indexing offerings.
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