Direct Indexing:
A New Way To Invest
This is provided for informational purposes only and should not be construed as investment advice. References to specific strategies should not be considered a recommendation.
Data and analysis does not represent the expected future performance of any investment product or strategy. Investments involve risks, including possible loss of principal.
Direct Investing may incur higher fees and minimums to participate and does not guarantee it will produce the desired tax results.
At Keystone Financial, we believe successful financial planning doesn’t stop once you’ve built wealth—it evolves with you. As your goals shift from accumulation to income, from growth to legacy, so should your investment strategy.
That’s where Direct Indexing comes in.
Once a tool once utilized by institutional and ultra-high-net-worth investors, Direct Indexing is now accessible to individuals—and we’ve been leveraging it for years as part of our proprietary TRIPP Process®. It’s a flexible, tax-smart investment approach that allows you to own individual stocks within an index, giving you the ability to harvest losses, manage gains, and build tax efficiency into your long-term strategy.
Whether you’re planning for retirement, managing a concentrated stock position, preparing for a major sale, or thinking about your legacy—Direct Indexing can play a powerful role.
1. Preparing for Retirement: From Growth to Income
As you near retirement, your priorities shift. Your focus turns from growing your portfolio to generating reliable, tax-efficient income. But making that transition without a plan can lead to costly mistakes—like triggering gains at the wrong time and shrinking your income with avoidable tax bills.
Direct Indexing allows us to harvest tax losses in advance, helping offset gains as we re-engineer your portfolio from growth-oriented to income-focused. It’s a strategic way to turn volatility into opportunity—and taxes into tools.
2. Equity Compensation: Don’t Let Taxes Take the Lead
Equity compensation—like RSUs and PSUs—can be a fantastic way to build wealth. But when shares vest or you finally sell, a large tax bill often follows. Many professionals simply accept this as the cost of doing business.
But it doesn’t have to be.
With Direct Indexing, we can build a portfolio of tax-loss carryforwards that help offset those future gains. The earlier we start, the more opportunity we have to reduce the tax impact when liquidity events happen. It's a proactive way to manage concentrated stock risk—without sacrificing growth potential.
Direct Indexing allows us to harvest tax losses in advance, helping offset gains as we re-engineer your portfolio from growth-oriented to income-focused. It’s a strategic way to turn volatility into opportunity—and taxes into tools.
3. Planning a Sale: Business, Property, or Investment Windfall
Thinking of selling a business, investment property, or appreciated asset in the next 5–10 years? A large capital gain may be unavoidable—but the tax hit doesn’t have to be.
Direct Indexing enables us to harvest losses strategically in advance. That means when the big sale comes, those losses can offset gains—potentially saving you in taxes. The longer the planning runway, the more powerful the strategy becomes.
This isn’t a last-minute move—it’s a coordinated plan that requires expertise, timing, and execution. That’s exactly what we do.
4. Legacy Planning: Make an Impact That Lasts
As your focus turns to the people and causes that matter most, your strategy should reflect that. The legacy phase of wealth planning is just as critical as the phases that came before—and taxes can erode the impact you intend to leave if you're not careful.
With Direct Indexing, we can help manage capital gains and tax exposure across generations. Whether you're planning to gift during your lifetime, reduce estate taxes, or simply ensure your family receives more and the IRS less, this strategy gives you greater control over how your wealth is passed on.
It’s not just about money—it’s about meaning.
Let’s Build a Smarter Plan, Together
Direct Indexing requires careful coordination between tax planning, investment strategy, and your long-term goals. At Keystone Financial, we integrate it seamlessly into our TRIPP Process® to help you align your wealth with what matters most—now and in the future.
Whether you’re approaching retirement, holding a large equity stake, planning a future sale, or thinking about your legacy, Direct Indexing can be a powerful tool to make your next chapter more intentional, and more tax-efficient. Tax savings may vary.
Let’s start the conversation.