Veriti Management, a provider of tax-advantaged, direct indexing solutions in the US, has announced its rebrand to First Trust Direct Indexing LP, as well as the appointment of Robert Hughes as Chief Executive Officer (CEO), taking the reins from Veriti Co-Founder and Managing Partner James Dilworth.
The firm writes that Hughes will focus on integrating the direct indexing capabilities and technology established by Veriti with the extensive resources and distribution network provided by its recent affiliate, First Trust Portfolios L.P. (“First Trust”).
The Veriti/First Trust affiliation comes at a time when there is heightened demand for more tax-efficient, personalised investment solutions, the firm says. With the prevalence of market volatility, advisers and their clients are looking for solutions that may help to maximise returns while minimising taxes. First Trust Direct Indexing seeks to turn volatility into an asset through tax loss harvesting strategies, which have the potential to increase an investor’s after-tax returns.
Direct indexing delivers bespoke portfolios that prioritise the potential to generate tax alpha and focus on values-based investing as well as factor and thematic positioning. Financial advisers, institutions, and wealth management firms can build portfolios of individual securities based upon customized exposures to a benchmark that their clients own via a tax-advantaged separately managed account (“SMA”). Because investors own individual securities, losses can be harvested at the individual security level, both intra-day and throughout the year.
“First Trust Direct Indexing is well positioned to help advisors solve the dual demands of individualised account customization and a smart approach to seeking tax alpha that can tilt client portfolios to their satisfaction,” says Hughes. “I’m excited to be joining at a pivotal time for our business and the industry. The elite team at First Trust Direct Indexing has developed a simple and powerful delivery tool for advisers and institutions, to help them meet clients where they’re at in terms of values, needs and goals.”
“First Trust Direct Indexing was built by and for advisers, and we believe it will be a natural leader in direct indexing solutions for the broader industry,” says Dilworth. “With expanded distribution channels, educational tools, and support, paired with Rob’s leadership, I have no doubt that the team will be able to quickly capitalise on explosive growth in the direct indexing market.”
Hughes’ background includes extensive experience at Alerian and S-Network Global Indexes (now VettaFi), where his roles as Co-Head of Distribution and Chief Commercial Officer saw him working closely with asset managers to launch new indexes and investment strategies. Previously, he spent nearly 15 years as Global Head of Index and Advisor Solutions for Nasdaq, where he led the global business development of Nasdaq Indexes and the Dorsey Wright and Associates’ RIA business. During his tenure, he supported launch of more than 300 exchange-traded products in 21 countries, including the first US-based index ETFs in India and China.