An investing innovation called “direct indexing”—in which investors use customized indexes that consider certain strategic priorities for portfolios— is getting attention from affluent investors and is likely to spread to retail investors as well. This according to a recent article in MarketWatch.

The article cites O’Shaughnessy Asset Management as one of the companies trying to address the need by creating a software product called Canvas—and offering it to a few select investment advisors to share with clients.

For clients, Canvas reportedly means that “rather than holding a bunch of individual securities that may or may not mesh well together, or being at the whim of fund creators who select the securities inside their funds according to their own beliefs, he can create a customized index that makes sense for him, in very specific ways.”

The article notes that Charles Schwab is working on its own, more broadly available version of direct indexing by offering what it calls stock “slices”—fractional shares that will make direct indexing “much easier for smaller accounts” and will “democratize it.”

According to ETF Database CIO David Nadig, “The big loser here is not financial advisers. The big loser here is BlackRock or State Street. Their business is taking other people’s intellectual property (indexes), packaging it up and distributing them to customers.” A player like Schwab, he says, is poised to integrate indexing, trading, and individual investor relationships in a “soup to nuts” approach.

But Morningstar’s director of global ETF research Ben Johnson argues that while a small group of investors would benefit from direct indexing, most people are better off sticking with a true index. Investment adviser and Canvas client Barry Ritholtz added that straight indexing “works for 90% of the people out there. This is more sophisticated and maybe a little intimidating to a lot of people.”