Direct indexing FTSE Russell survey is interesting, but AI claims are 💩

FTSE Russell surveyed 402 advisers and shoehorned in AI nonsense

May 30, 2025

Lots of interesting bits in the FTSE Russell survey

FTSE Russell - Direct Indexing: A critical tool for Wealth Managers

But… “Artificial intelligence (AI) is serving as a catalyst speeding adoption, as it can automate implementation of tax efficiencies” …is a joke. 🤡

No serious person I know in wealth management lets generative AI anywhere near the money.

Some may use AI/ML for stock selection, but that has nothing to do with “tax efficiencies,” which… what are we even talking about?

The most popular DI feature, according to the FTSE Russell survey, is… tax-loss harvesting. That’s rules-based.

The next is tax-efficient transitions… also rules-based.

Generative AI is great for tasks where 90% accuracy is acceptable, like drafting emails, writing some (not all) code, and summarizing white papers.

Of advisers surveyed, “Eighty-one percent agree that advancements in AI and automation will help drive use of DI [how?]. By way of explanation, some advisors are beginning to leverage AI to automate tax efficiency [like what?] – whether across different managed account platforms or for multi-asset portfolios.”

???

“AI and automation” is funny since “AI” isn’t doing anything useful to drive “tax efficiencies,” yet, but automation is.

It’s sorta like saying between Warren Buffett and me, there’s north of $150 billion in net worth. One of us isn’t pulling our weight.

Survey results

I don’t know why “AI” is in this sentence

How can it be both?

Consistent with what I’ve heard: folks imagine direct indexing operational headaches more than they experience them.

Is it useful to ask people what they think?

There’s a scene in Moneyball1, where Michael Lewis quotes Bill James: “Is baseball really 75% pitching? James J. Skipper attempted to answer this question in the 1980 Baseball Research Journal, by the ingenious method of asking everybody in sight what percentage of baseball was pitching, totaling up their answers, and dividing by the number of people in sight…”

In marketing, some wise advice is asking folks what they think immediately after making a purchase. What lead them to pull the trigger?

Everything before that is giant grain of salt territory.