Direct indexing when most of your net worth is the company
by Malik Amine
Educational notice
Not tax advice. Not a recommendation to open a separately managed account.
The actual problem
If salary, unvested grants, vested shares, and a 401(k) match all point at one company, buying an S&P 500 fund that also holds that company is not a full diversification story. Direct indexing is often pitched as a way to own the rest of an index while excluding or underweighting the name you already have.
What the product generally is
A separately managed account holds individual lots. Managers talk about tax-loss harvesting and custom exclusions. Fees, tracking difference, wash-sale pairing with other accounts, and whether you even have a taxable account large enough to matter are the unglamorous details.
What it does not do
Direct indexing does not unlock private shares. It does not clear an insider trade. It does not fix a grant you have not read. It is a taxable-account construction idea that may or may not fit after a CPA and advisor look at the whole picture.