Frec Launches Direct Indexing, Takes First Mover Advantage — Exclusive Insights From CEO Mo Al Adham (UPDATED)

Editor's note: This story has been updated to add more specific language concerning Frec's direct indexing product. 

A self-service investment platform, Frec announced the receipt of $26.4 million in funding that was led by Greylock Partners and participation from Social Leverage, Conversion Capital, and several notable angel investors.

In an interview with Benzinga, CEO Mo Al Adham highlights that Direct Indexing is priced similarly to the expense ratio of an ETF, Frec DI at 0.10% currently compared to SPY’s expense ratio being 0.0945%. Also, their product offers additional benefits of tax savings, performance improvements, and customization opportunities.

Adham’s comments come at a time when the fintech landscape is witnessing a surge in volumes and performance. Benzinga's Future of Digital Assets conference, scheduled for Nov. 14, is poised to be a pivotal gathering for the digital assets community. The event will spotlight the latest trends, innovations, and challenges in the digital asset realm.

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Frec said Direct Indexing can create key value additions for investors if chosen as an investment option. Based on the company’s algorithms, daily tax loss harvesting can capture up to 45% of an investment in capital losses besides market returns in case the tax savings are reinvested.

Also, customers can create their direct index from existing stock positions they own. Lastly, the personal touch of a wealth advisor to customize portfolios that are not available in the broader consumer fintech landscape. Investors can pick their preferred sector or individual stock options.

Currently, Frec DI will support two indices, enabling customers to track the S&P 500 and Infotech (65 of the biggest technology companies by market cap). It looks to launch many more indices soon.

Unlike other options like Mutual Funds and ETFs, Frec DI supports investors to own the underlying stocks of that index and benefits them with tax loss harvesting opportunities. Mo adds that if consumers do not have any capital gains, they can still offset up to $3,000 per year in ordinary income generating larger savings for the future.

Amid the expanding landscape of fintech companies, Adham said that besides DI, Frec has a significant range of product offerings like a portfolio line of credit to allow customers to borrow against their stocks and Frec Treasury for customers optimizing their idle cash and earn up to 5.02% through automated investing in money market funds. Frec has also partnered with AngelList to natively power money market funds for fund managers.

Adham states that “fintech companies exploring adjacent lines of business to their core business is the paradigm shift of re-bundling.”

Meet and engage with transformative Digital Asset and Crypto business leaders and investors at Benzinga's exclusive event: Future of Digital Assets. Tickets are flying: Get yours!  With a lineup of esteemed speakers and industry experts, the conference is set to offer attendees a comprehensive understanding of where fintech stands today and where it's headed. 

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