Because each Direct Index is a distinct sub-account, funds are handled in a specific way.
Deposits & Cash Balance
When you add cash, it is automatically invested according to your Direct Index strategy, typically at the start of the next trading day. The system maintains a small cash balance (around 0.25%) to cover management fees without needing to sell securities.
Dividends paid by your holdings are treated like new deposits and are reinvested across the entire portfolio, not just back into the stock that issued them.
Withdrawals
You cannot withdraw funds directly from a Direct Indexing account to an external bank. You must first sell positions, which moves the proceeds to your main brokerage cash balance. From there, you can initiate a withdrawal.
Any reference to securities, indexes, or strategies in this communication is for informational and illustrative purposes only, and should not be construed as investment or tax advice.
Investment advisory services for Direct Index Accounts (“DI Accounts”) are provided by Public Advisors LLC, an SEC-registered investment adviser, and brokerage services are provided by Open to the Public Investing, Inc., member FINRA / SIPC. Public Advisors and Public Investing are affiliates, and both charge fees for their respective services. Before investing, consider your investment objectives, all fees and expenses, and any potential conflicts of interest. For more details, see Public Advisors’ Firm Brochure, Form CRS, and Fee Schedule.
Your DI Account’s composition and performance may deviate from the benchmark index due to tracking error, market conditions, the frequency of rebalancing and tax loss harvesting, and any portfolio customizations. Indexes are not available for direct investment; therefore, their performance does not reflect the expenses associated with management of a DI Account. See additional disclosures.
Tax-loss harvesting (“TLH”) occurs whenever your DI Account rebalances or experiences a cash inflow or outflow. In order to opt out of TLH, you must set your rebalancing schedule to “None.” The ability of TLH to reduce tax liability is not guaranteed and will depend on your entire tax and investment profile. The performance of replacement stocks purchased through TLH may be worse than the securities sold, and TLH may cause the composition and performance of your portfolio to deviate from the benchmark index. Learn more about additional TLH risks. Public Advisors does not provide tax advice or assume liability for tax consequences of client transactions.
Any S&P index (“S&P Index”) referenced in this communication is a product of S&P Dow Jones Indices LLC or its affiliates (“SPDJI”), and has been licensed for use by Public Holdings. S&P® and S&P 500® are trademarks of S&P Global, Inc. or its affiliates (“S&P”); Dow Jones® is a registered trademark of Dow Jones Trademark Holdings LLC (“Dow Jones”); and these trademarks have been licensed for use by SPDJI and sublicensed for certain purposes by Public Holdings. Public Advisors’ Direct Indexing products are not sponsored or, sold by SPDJI, Dow Jones, S&P, their respective affiliates, and none of such parties make any representation regarding the advisability of investing in such product(s) nor do they have any liability for any errors, omissions, or interruptions of any S&P Index.