Interactive Brokers announced the launch of Custom Indexing for Registered Investment Advisors (RIAs), a direct indexing solution that enables RIAs to personalize client portfolios. Custom Indexing allows RIAs to create custom portfolios for their customers that directly hold the underlying securities of an index rather than purchasing a traditional index fund.
Why is the solution a game changer?
This provides several benefits, such as the ability to customize portfolios to align with specific investment objectives, as well as include or exclude specific stocks based on ESG preferences and other factors. Unlike traditional ETF investing, Custom Indexing doesn’t have an expense ratio and comes with low minimums, allowing RIAs to customize investing to clients’ needs.
“IBKR’s complete suite of advisor services, including no custody fees or minimums, advanced trading platforms, global market access and no in-house advisory team to compete with advisors, make us the ideal custodian for RIAs of all sizes. Custom Indexing further enhances this package and enables advisors to create tailored portfolios aligned with their client’s specific investment goals,” said Milan Galik, Chief Executive Officer of Interactive Brokers.
RIAs using Custom Indexing through Interactive Brokers will have access to a range of index options, including popular indices and ETFs like the S&P 500 and the NASDAQ 100. They can fine-tune their portfolios by adjusting the weightings of individual securities within the index.
What is the market offering of Custom Indexing?
Custom Indexing through Interactive Brokers lets RIAs:
- Create and customize direct index models based on a curated list of ETFs
- Modify target weights or use custom rules that support user-defined and ESG-related exclusion lists
- Overweight or underweight stocks on a variety of financial metrics
In addition to Custom Indexing, Interactive Brokers offers a range of tools and resources to help RIAs manage their businesses, including portfolio analytics, performance reporting, and a robust trading platform. Features available on the IBKR RIA platform include:
- No ticket charges, no custodial fees, no minimums, and no technology, software, platform, or reporting fees
- No in-house advisory team to compete with advisors for clients
- Ability to trade stocks, options, futures, currencies, bonds, and funds on 150 markets from a single unified platform
- Specialized advisor tools, including trade allocation, tax-loss harvesting, model portfolios and many others
- Free CRM, portfolio management, and trading platform, plus PortfolioAnalyst®, which gives advisors the ability to consolidate and analyze a client’s entire portfolio, including assets held at other institutions
- Automated and flexible client billing
- Free website-building services
- Debit Card and Bill Pay functions available for US advisor clients