Best direct indexing providers for 2026

More investors are exploring direct indexing – once limited to institutions and the wealthy. With zero-commission trading and fractional shares now widely available, retail investors can finally access its benefits too: tax-loss harvesting, ESG and values-based screens, and personalised indexing aligned with both financial and ethical goals.

This article explains what direct index investing is, walks through the best direct indexing providers currently available, and helps you decide whether it makes sense for your portfolio.

What is direct indexing?

Direct indexing refers to the method of replicating an index – such as the S&P 500 or FTSE 100 – by directly holding the underlying securities in your own portfolio, rather than buying a single index fund or ETF that holds them on your behalf.

Instead of relying on a fund provider to simply track an index with no adjustments (whether for tobacco companies, fossil fuels, or any other exclusion you might want), direct indexing enables you to:

1. Selectively deviate from the underlying index by excluding or overweighting specific securities or sectors.
2. Control when you buy or sell each individual position – opening up systematic tax-loss harvesting at the security level rather than only at the fund level.
3. Adjust the position size of each holding to reflect your own preferences or constraints (concentration limits, sector tilts, factor exposures).
4. Choose automatic dividend reinvestment or exclude dividend-paying securities altogether, depending on your tax situation and income needs.

Direct index investing versus passive investing

Passive investing, by contrast, is – by definition – passive: it removes your ability to choose which underlying securities you hold. Standard index mutual funds and ETFs fall into that category, and many professional advisors build portfolios by combining several of these funds into a single allocation.

Passive fund investing comes with several limitations, however, and is generally best suited to investors who don’t want individual control over their holdings or who have no significant tax considerations to manage.

For example, the Vanguard 500 Index Fund Admiral Shares (VFIAX) tracks the S&P 500 with an expense ratio of just 0.04%, a 30-day SEC yield of around 1.05%, and a $3,000 minimum investment. It’s an excellent low-cost way to own the S&P 500 – but you own the entire index as-is, with no ability to exclude individual stocks, harvest losses at the security level, or tilt the portfolio toward (or away from) anything specific.

If you’re concerned about your overall tax bill, or simply don’t want to hold particular sectors – alcohol, tobacco, firearms, fossil fuels, or anything else you choose to exclude – then a standard index fund may not be the best fit. Direct indexing gives you that level of control.

Best direct indexing providers

Fidelity is a leading online broker in the US and abroad, with an exceptional offering that blends the best of a zero-commission discount broker with a full-service investment manager known for attracting top talent. With over 50 million individual customers and $17.9 trillion in assets under administration, Fidelity is one of the largest financial services firms in the world.

Fidelity charges nothing for US stock and ETF trading, offers a free self-directed account, and maintains a list of more than 3,000 no-transaction-fee mutual funds for passive investing. It also offers extensive research and a robust trading platform, Active Trader Pro, with many advanced features.

Fidelity’s direct index investing service comes in three tiers, catering to different goals and account sizes:

1. Fidelity Basket Portfolios (formerly Solo FidFolios) lets you build and manage your own custom basket of stocks and ETFs, or pick from pre-built themes – though tax management is on you. The service has a $1 per security minimum and a $4.99/month flat fee after the introductory trial.
2. Fidelity Managed FidFolios is the Fidelity-managed direct indexing tier that tracks major indexes with optional ESG/sustainability and other personal preferences. The minimum is $5,000, with an advisory fee of 0.40% for index-tracking strategies (or 0.70% for actively managed ones).
3. Fidelity Wealth Management / Separately Managed Accounts represents the premium option, with guided investing, tax management, long-term planning, and a customised portfolio. Minimums range from $100,000 to $350,000 depending on the strategy, with advisory fees scaling by account balance.

Fidelity’s ability to cater to every level of investor sophistication and wallet size makes it our pick for the best direct indexing provider.

Schwab is another leader in online investing, combining a no-nonsense discount broker with a top-notch advisory arm capable of handling tax-sensitive trading. Following its acquisition of TD Ameritrade (closed 2020), Schwab is now the largest US retail broker by client assets, with over $11.8 trillion in total client assets as of Q1 2026.

Schwab charges nothing for US stock and ETF trading, offers a free self-directed account, and provides access to over 4,000 no-transaction-fee mutual funds for passive investing. Its flagship trading platform is now thinkorswim (inherited from TD Ameritrade), available in Desktop, Web, and Mobile versions. thinkorswim Desktop is the professional-grade platform with thinkScript custom indicators, paperMoney paper trading, advanced options analytics, and 400+ built-in studies. The legacy StreetSmart Edge and StreetSmart Central platforms have been retired.

Schwab provides its personalised index investing service – Schwab Personalized Indexing – through a financial consultant. The platform starts with several base index strategies (US large-cap, international developed, and ESG-focused, among others) which you can then customise by excluding individual stocks or industries; tax-loss harvesting is handled automatically.

There is a $100,000 minimum to get started, with fees starting at 0.40% and decreasing at higher asset levels. Schwab’s service makes most sense for high-tax-bracket investors with complex portfolios who want professional management of the tax-loss harvesting process.

Wealthfront is an established leader among robo-advisors – online advisors foregoing the expenses of human advisors in favour of automated and algorithmic investing backed by sound risk management principles. With roughly $80 billion in AUM and now part of UBS following its 2024 acquisition, Wealthfront has scaled significantly while keeping its low-cost, tech-first ethos.

Wealthfront is unlike a traditional discount broker that provides the tools necessary for you to get started on your own. Investment accounts start at just $500, with zero account fees, free rebalancing, daily tax-loss harvesting, and a flat 0.25% management fee. The focus is on handing investment control to a customised portfolio designed with the help of Wealthfront’s algorithms.

Wealthfront’s direct indexing offering now comes in two flavours:

1. US Direct Indexing within the Automated Investing Account, available from $100,000 at no additional cost beyond the standard 0.25% advisory fee. At $100K+, Wealthfront replaces the US stock ETF in your portfolio with up to 100 individual stocks tracking the index; at $500K+, the strategy expands to roughly 600 stocks.
2. S&P 500 Direct and Nasdaq-100 Direct, standalone direct indexing portfolios launched in 2024-2025, with a far lower $5,000 minimum and fees of just 0.09% and 0.12% respectively.

Wealthfront handles all rebalancing and tax-loss harvesting automatically, placing it firmly within the top three of our list for the best providers of direct indexing.

For those who don’t know, veteran broker E*TRADE is now owned by global wealth management powerhouse Morgan Stanley, having been acquired in October 2020. This combination is a great fit for retail traders who want access to direct indexing alongside a full-featured trading platform.

E*TRADE matches the high bar set by Fidelity and Schwab with $0 stock and ETF commissions, no account minimums, more than 6,000 no-transaction-fee mutual funds, and well-regarded desktop and mobile trading platforms (the Power E*TRADE platform handles options and active trading). E*TRADE’s mobile app is particularly impressive, with Bloomberg TV integration, third-party research, and breaking news.

Similar to Wealthfront, direct indexing is available for accounts of at least $100,000, delivered through Morgan Stanley’s institutional-grade Parametric Custom Core platform (Parametric is one of the pioneers of direct indexing, dating back to the 1990s). The full power of personalised investing – including individual exclusions, ESG tilts, and tax-loss harvesting – is available, provided you work with a Morgan Stanley financial advisor.

We feel Morgan Stanley is a great option and direct indexing provider for those who want that human touch alongside one of the longest track records in the business.

Vanguard is a world-famous provider of passive investing strategies, most commonly through its ETFs – VOO, VTI, BND, and others you’ve likely heard of before. The company is the de facto king of low-cost, buy-and-hold passive investing, managing approximately $12 trillion globally on behalf of more than 50 million investors.

Vanguard also offers discount brokerage with no account minimums and no commissions on US stocks and ETFs. There are no closing or inactivity fees, and Vanguard’s own funds carry no transaction fees. (Note that Vanguard introduced a small per-trade fee for transacting in non-Vanguard mutual funds in 2025, so check the schedule before trading outside the family.)

Vanguard offers direct indexing under the name “Personalized Indexing” (run by Vanguard Personalized Indexing Management LLC, formerly Just Invest, acquired by Vanguard in 2021). The service focuses on tax-loss harvesting and supports ESG and other customisations. However, the service is advisor-led only with a minimum of around $250,000, putting it well out of reach for most retail investors.

Vanguard’s self-directed brokerage account also feels lacking compared to peers, with a more basic trading platform, less research, and no live chat. If you’re big on ETF investing and want to add some direct indexing exposure, Vanguard works best if you already have an advisor relationship. For retail investors, we would rather recommend Wealthfront – which uses Vanguard ETFs alongside optimised direct indexing at a fraction of the minimum.

Well known to professional and retail investors alike across the globe, JP Morgan also offers a self-directed account through J.P. Morgan Self-Directed Investing (delivered through the Chase Mobile app and chase.com), suitable for beginners looking to delve into the world of investing and risk management.

Like most discount brokers, the platform offers zero-commission stock and ETF trades alongside no account minimums, though it surprisingly lacks the depth of advanced trading tools and research you’d find at Fidelity, Schwab, or E*TRADE. The real reason to choose JP Morgan for index-style investing is their portfolio builder tool, available with a $2,500 minimum.

The tool – like the Chase Mobile app it lives within – is well-designed and intuitive, taking away much of the leg work involved in manually building a diversified portfolio. However, it is closer to a model portfolio builder than true direct indexing: tax-loss harvesting is not automated, customisation is limited, and you would be responsible for choosing how closely to mirror any particular index. For automated tax-loss harvesting and deeper personalisation, JP Morgan Wealth Management’s 55ip platform (acquired in 2020 and now powering JPM’s advisor-led tax-managed strategies) is the more serious offering, though it requires an advised account.

JP Morgan is a good choice for beginner investors who want to build their own index-like portfolio within the familiar Chase ecosystem and are not heavily focused on tax optimisation.

Should I go for direct indexing?

Direct indexing may not be for you. The cons may outweigh the pros, and it’s a personal, long-term decision not to be taken lightly.

The best of direct indexing comes when you have a helping hand – whether from your investment advisor or your tax consultant. It tends to benefit the tax-sensitive investor with a sizeable taxable portfolio, a high marginal tax rate (since the tax-loss harvesting alpha scales directly with your tax bracket), and other income streams that can absorb investment losses. All the better if that investor also has specific values-based preferences – ESG, climate, fossil-fuel exclusions, fair governance, or simply wanting to avoid a particular sector or stock.

The traditional $100,000+ threshold has come down meaningfully in recent years – Wealthfront’s S&P 500 Direct starts at $5,000, Frec at $20,000, and Fidelity Managed FidFolios at $5,000 – so meaningful direct indexing is now accessible to mass-affluent investors, not just the high-net-worth tier.

However, if you can already offset most of your tax bill through tax-advantaged retirement accounts (401(k), IRA, Roth IRA), or if you don’t have the inclination to monitor your portfolio actively, we would advise sticking to a simple ETF- or fund-centric portfolio. Direct indexing offers no benefit inside tax-advantaged accounts, where the tax-loss harvesting machinery is irrelevant. A hybrid approach – direct indexing on the US large-cap portion of your taxable account, alongside low-cost globally diversified ETFs for the rest – is one practical middle ground.

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