Frec

Name

Frec

Legal name

Frec Markets, Inc.

Website

https://frec.com

Company type

Private

Founded year

2023

Operating status

Operating

Headcount range

11–50 employees

Ownership category

akta.pro rank

Product category

Direct Indexing Platform

NAICS

Portfolio Management and Investment Advice (523940), Securities, Commodity Contracts, and Other Financial Investments and Related Activities (523)

SIC

Investment Advice (6282), Security Brokers, Dealers & Flotation Companies (6211)

akta.pro primary industry

Execution-Only / Self-Directed Investing Platforms (FSAAAAAI)

Keywords

• Direct indexing platform
• Tax-loss harvesting
• Automated portfolio management
• Retail wealth management
• Algorithmic investment software

Headquarters

HQ city

San Francisco

HQ country

United States

HQ region

North America

Offices1 record

Markets served

GTM type

B2C

Offering type

Software

Cost components

Technology or R&D, Personnel, Operations, Marketing or Sales, Infrastructure

Revenue model

1. Asset Under Management (AUM) Fees: Charges an annual percentage fee on assets under management. Fees range from 0.09% for S&P 500 to 0.35% for other indices. The platform manages over $1B in assets.
2. Portfolio Line of Credit Interest: Generates interest income from portfolio line of credit facilities offered to customers. Rate is Effective Federal Funds rate plus 1%, currently 4.64% APY.
3. Treasury Yield Spread: Earns yield on customer cash held in treasury accounts while paying customers a portion of the yield (currently 3.34% to 4.64%).

Pricing tiers

Go-to-market motion2 records

Distribution channels5 records

Marketing channels6 records

Core offering

Frec operates a self-service direct indexing platform that purchases individual stocks of market indices (such as the S&P 500, CRSP, and Russell indices) on behalf of retail investors instead of holding ETF shares, enabling daily automated tax-loss harvesting to offset capital gains. The offering is delivered as a digital product with no human advisor required, complemented by treasury cash management, a portfolio line of credit, concentrated-stock diversification, and a self-directed trading module.

Product overview

Frec is a financial technology platform offering automated direct indexing investment products for retail investors. The core product is Frec Direct Indexing, which enables tax-efficient market investing by purchasing individual stocks of indices (S&P 500, Russell, CRSP, MSCI) and harvesting daily tax losses. The platform offers a modular architecture: the core direct indexing engine supports 25 index options with customization (exclude stocks/sectors, manage dividends), complemented by add-on products including Long Short Direct Indexing for enhanced returns, Frec Diversify for tax-aware stock diversification, a Portfolio Line of Credit for low-rate borrowing against holdings, Frec Treasury for earning yield on idle cash, and Frec Trade for self-directed trading. All products are self-service through a modern digital platform with no human advisor required, and funds are held at third-party custodian Apex Clearing.

Differentiator

Problem solved

Functional benefit

Brands

• Frec Direct Indexing: Tax-aware direct indexing platform that tracks S&P indices and offers automated tax-loss harvesting for retail investors
• Frec Treasury
• Long Short Direct Indexing
• Frec Diversify
• Portfolio Line of Credit
• Frec Trade

Products and services

• Frec Direct Indexing Automated direct indexing platform that purchases the individual stocks of an index (e.g., S&P 500) instead of ETF shares, enabling daily tax-loss harvesting to generate capital losses that offset capital gains and reduce tax liability for retail investors.
• Long Short Direct Indexing Advanced direct indexing variant combining long positions with short positions using a Quality factor tilt, formerly exclusive to hedge funds with $1M minimums, now available on Frec for retail investors seeking higher after-tax excess returns.
• Frec Diversify Feature enabling users to transition concentrated stock positions into diversified index-tracking portfolios over time while minimizing tax impact through tax-aware selling strategies.
• Portfolio Line of Credit Borrowing service allowing users to access up to 70% of their portfolio value at low interest rates (4.64% APY) without selling stocks or triggering capital gains taxes.
• Frec Treasury High-liquidity treasury account enabling users to earn yield on idle cash (3.34% as of latest reporting) by investing in low-risk US treasury mutual funds, with funds accessible anytime.
• Frec Trade Self-directed trading platform offering zero-commission stock and ETF trading with granular control over individual tax lots, market/day limit orders, real-time prices, and auto-conversion features to redirect positions to direct indices.

Quantifiable outcome

• 40% of portfolio value in tax losses harvested over 10 years
• +7 more outcomes

Named customers6 records

Segments4 records

Ideal customer profiles4 records

Technology focussed Yes

API detail

Has API

No

API docs

API detail

Core technology

AI maturity

App detail

Integration4 records

AI capability2 records

Feature8 records

Partnerships

Five partnerships are on record, tiered core and supporting.

• Apex ClearingcoreTechnology or IntegrationThird-party custodian holding customer assets. One of the largest U.S. custodians with over $200B in assets for leading fintech companies. Provides asset protection and transfer capabilities.
• PlaidcoreTechnology or IntegrationPlaid integration enables customers to securely link bank accounts and transfer stocks from other brokerages including Robinhood, Fidelity, Vanguard, Wealthfront, Betterment, and E*Trade.
• MSCIcoreTechnology or IntegrationLicensed the Barra Global Total Market Equity Model for Long-Term Investors. Provides factor-based risk modeling for portfolio optimization, tracking error forecasting, and enhanced tax-loss harvesting performance.
• S&P Dow Jones IndicescoreTechnology or IntegrationLicensed S&P 500 and other S&P indices for direct indexing strategies. S&P 500 is a product of S&P Dow Jones Indices LLC.
• XignitesupportingTechnology or IntegrationLicensed dividend and split-adjusted daily stock price data from Xignite for historical backtesting and simulation analysis.

Scale indicators9 records

Expansion highlights6 records

Direct peers

• Wealthfront: Wealthfront is a leading self-directed robo-advisor offering direct indexing, automated portfolio management, and cash management. It is the most direct competitor to Frec, serving the same retail-to-HNW segment with similar product features and fee model.
• Betterment: Betterment is a pioneer in robo-advisory offering automated investing with tax-loss harvesting, direct indexing, and goal-based planning. It directly overlaps with Frec's target customer (self-directed retail investors) and product suite.
• Parametric: Parametric is a long-standing direct indexing specialist serving HNW and institutional clients. It is one of the original direct indexing platforms and a primary competitor in the customized indexing category Frec is targeting.
• M1 Finance: M1 Finance is a self-directed investing platform offering automated portfolio management, fractional shares, and integrated banking/credit products. It overlaps with Frec on the self-directed retail investing thesis and modular product approach.

Broad incumbents

• Schwab Intelligent Portfolios: Schwab's robo-advisor offering includes tax-loss harvesting and direct indexing for retail clients. Backed by a major brokerage, it competes with Frec on price, brand trust, and asset integration within Schwab's ecosystem.
• Fidelity Wealth Management: Fidelity offers direct indexing through Fidelity Wealth Services with a 0.40% fee point. As one of the largest US brokerages, it has scale advantages Frec will struggle to match and is explicitly named as a competitor in Frec's own marketing.
• Robinhood: Robinhood is the largest US self-directed retail investing platform, offering zero-commission trading, retirement accounts, and increasingly premium products. While not focused on direct indexing, it competes for the same customer base and is a stock transfer source for Frec.

Emerging players

• Titan: Titan offers self-directed investing with active strategies and crypto exposure for retail investors. While not focused on direct indexing, it competes for the same millennial/tech-employee retail segment Frec targets.
• Stash: Stash offers self-directed investing with managed portfolios and subscription tiers for retail investors. It overlaps with Frec at the entry-level retail investor segment but does not yet offer direct indexing at the same sophistication.

Peers

• StockBond Custom Indexing by BlackRock:

Market position

Strengths5 records

Weaknesses5 records

Competitive moat6 records

Key risks6 records

Key highlights7 records

Customer concentration

• Xx.com/frecfinance
• LinkedInlinkedin.com/company/frecfinance

Compliance5 records

Revenue estimate

Valuation estimate

Number of profiles

Profiles1 record

Subsidiaries2 records

Funding overview

Funding rounds2 records

Investors5 records

Funding detail is available on the Subscription and Enterprise plan.Contact sales →

M&A

Investments

M&A and investment is available on the Subscription and Enterprise plan.Contact sales →

Frequently asked questions about Frec