Northern Trust survey finds direct indexing increases advisor retention and wallet share

Direct indexing is helping financial advisors grow their business and strengthen client relationships, according to a new survey by Northern Trust Asset Management.

The survey found that advisors who have fully integrated direct indexing into their practice report not only enhanced client retention and a better client experience but also an increased share of wallet from existing clients, demonstrating its value beyond tax-loss harvesting.

Northern Trust Asset Management’s research shows that these direct indexing “Superusers” have followed a repeatable journey through education, assessment and testing before reaching the integration stage. Advisors who reached Superuser status shared the actions they took and how they engaged with clients along the direct indexing journey, providing a roadmap for other advisors.

The research found:

Direct indexing adoption drives business growth: 88% of Superusers report stronger client retention and 87% report increased wallet share after integrating direct indexing. Most began with a handful of clients, then expanded rapidly as positive results and client satisfaction became clear.

Direct indexing goes beyond tax-loss harvesting: Direct indexing enabled deeper client engagement, differentiated service and a competitive advantage. 93% of Superusers say direct indexing enables more meaningful planning conversations.

Personalisation is the new standard: Advisors and clients value direct indexing for more than tax benefits. Portfolio customisation, risk management, transparency and goal planning are central to the client experience, reshaping how advisors deliver value beyond portfolio returns.

Integration is easier than expected: Superusers rated direct indexing integration 2.4 out of 5 in difficulty, with 45% saying it requires only 0-5 hours per month. 41% would integrate direct indexing more aggressively if starting over.

Clients that benefit the most share common traits: Advisors can look for commonalities that signal the best fit for direct indexing accounts, including: a typical entry point of $250K to $500K+ in investable assets, taxable accounts and a desire for personalisation.

“Direct indexing can empower financial advisors to deliver personalised, transparent, and effective portfolio management, strengthen client relationships and drive business growth,” said Suzanne Casey, co-head of the wealth client group, Northern Trust Asset Management. “Direct indexing is becoming the default expectation among wealthier clients, so advisors who integrate it into their practice are positioning themselves for long-term success.”

“Direct indexing is no longer just a tax tool—it’s a transformational platform for advisors and clients alike,” said Ken Lassner, CFA, direct indexing lead product strategist, Northern Trust Asset Management. “This research shows how direct indexing is driving real business results for financial advisors and elevating the client experience. And with the tools, resources and dedicated support Northern Trust Asset Management provides, we’re helping advisors unlock direct indexing’s full potential.”

Northern Trust Asset Management conducted two comprehensive surveys in 2024 and 2025 to understand direct indexing adoption among financial advisors. The first survey included a quantitative sample of 300 advisors across various channels (RIA, IBD, wire, bank/trust) and in-depth interviews with 31 advisors, focusing on direct indexing usage and stages of adoption.
The second survey targeted “Superusers”—advisors who have fully integrated direct indexing into their practice—through a quantitative sample of 87 advisors and interviews with 11 Superusers. Both studies centred on higher-AUM firms and experienced advisors.

Re-disseminated by Wealth and Society