Talk Your Book: How Custom Indexing Works

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Sep 8, 2025

Ehren J. Stanhope, Chief Investment Strategist at Canvas Custom Indexing, delves into the evolution of investment products and the transformative power of custom indexing. He emphasizes how 2019 marked a pivotal change, enhancing accessibility for financial advisors. The discussion highlights strategies for managing concentrated portfolios during market volatility and the crucial role of education regarding custom indexing. Stanhope also details the integration of technology in financial advisory, which significantly impacts personalized investment management.

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INSIGHT

2019 Was The Inflection Point

October 2019 was the watershed for direct/custom indexing because transaction costs effectively disappeared.
That change shifted the market from white-glove ultra-HNW service to mass-market adoption of direct indexing.

INSIGHT

Appreciation Created A New Problem

Rapid market gains created a new problem: many direct-index portfolios exhausted easy tax-loss harvesting opportunities.
The industry is now racing to build tools like 351 exchanges to address post-appreciation tax and liquidity issues.

ADVICE

Model Client Cash Flows First

Consider client cash flows when recommending 351 exchanges because many clients dip in and out of accounts each year.
Model withdrawals and inflows to choose tax strategies that minimize real-world tax impact.

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