Envestnet Announces Model Portfolios, Direct Indexing Offerings

Envestnet announced offerings of BlackRock custom model portfolios for registered investment advisers and direct indexing portfolios on the Envestnet unified managed account platform in collaboration with State Street Global Advisors.

Making the announcements at its Elevate conference, the company announced both products will assist advisers in expanding offerings to meet the evolving demands of clients and the marketplace.

RIAs will have access to BlackRock’s custom model capabilities, managed within a single account and powered by Envestnet’s UMA technology. The portfolios will include exchange-traded funds and mutual funds at first, with separately managed accounts, private markets and other alternative exposures expected in the near future.

According to Envestnet, the solution will help RIAs scale their practices more efficiently, reduce operational risk and spend more time focusing on client relationships—especially important, given its 2022 research found that allocating more than 75% of a practice to model portfolios consistently achieved higher valuations.

“We’re excited to offer advisers on our platform access to these innovative custom model solutions that reflect our shared commitment to providing scalable solutions that can help drive better client outcomes,” said Dana D’Auria, Envestnet’s co-chief investment officer and the group president of Envestnet Solutions, in a statement. “By offering BlackRock’s custom model portfolios on our platform, we’re equipping RIAs with the tools they need to deliver high-quality, customized portfolios with greater efficiency and scale—and without added costs.”

Direct Indexing

Direct indexing at Envestnet with State Street Global Advisors offers investors the ability to create customized, tax-aware portfolio solutions at scale, featuring more than 100 points of customization and optional tax overlay services. The indexing comes through a partnership with QRG Capital Management, Envestnet’s in-house investment team and a pioneer in implementing direct indexing within the UMA construct.

With direct indexing, investors hold the individual securities that make up an index, rather than pooled vehicles like ETFs or mutual funds. According to Envestnet, the new offering includes a suite of actively and passively managed direct indexing strategies with $100,000 account minimums:

• SSGA Global Equity Direct Index Portfolio
• SSGA US Large Cap Quality Direct Index Portfolio.

“Direct indexing represents the next chapter in personalized portfolio construction,” said Aaron Bauer, Envestnet’s strategic partnership head. “By bringing together the scale and innovation of State Street Global Advisors with the integrated technology of the Envestnet platform, we’re helping advisers unlock the full potential of tailored, tax-efficient investment solutions.”