Parametric vs Aperio Pricing: Direct Indexing SMA Fees

On the headline rate these two are the same product: Parametric files 35 bps for Custom Core Equity (Domestic) and Aperio files 0.35% for a US domestic benchmark, both in Form ADV Part 2A brochures dated March 31, 2026. The differences that actually move a quote are underneath. Parametric publishes a per-strategy ladder that runs from 23 bps to 65 bps, and the 23 bps row is the cheapest published direct indexing SMA fee in the adviser channel. Aperio prices by what the portfolio tracks instead of by strategy, so going global costs a flat five basis points more and adding a values screen costs a flat ten, at any account size. Aperio publishes no firm-wide minimum at all. And on both, the platform and adviser layers stacked on top are routinely larger than the manager fee you spent the meeting negotiating.

This is educational. We build index construction and backtesting software. We do not manage money, hold accounts, or give investment or tax advice. Every fee and minimum below was read out of the named filing on the date stated, and these schedules change with each annual amendment.

The filed schedules, side by side

Almost nothing published about these two managers quotes their actual brochures. Here is what each firm filed, with nothing added.

Sources: Parametric Portfolio Associates LLC, Form ADV Part 2A dated 03/31/2026, Items 5 and 8; Aperio Group, LLC, Form ADV Part 2A dated 03/31/2026, plus its Part 1A filed April 2, 2026; the Morgan Stanley Select UMA manager profiles for Parametric Custom Core S&P500 and Aperio ActiveTaxGlobalIndexing.

The 23 bps row nobody quotes

Parametric's brochure is not one rate, it is a menu, and the row at the top of it gets almost no attention. Custom Portfolio Management is filed at 23 basis points with a $250,000 minimum. That is a third cheaper than the 35 bps everyone quotes as the Parametric price, and it is the lowest published manager fee in the adviser-sold direct indexing category. Aperio has nothing below 0.35%.

The rest of the ladder is worth having in front of you before a quote arrives, because it tells you exactly where the pricing conversation is likely to end up:

One line in the same filing is worth pricing separately: Parametric's standard fee for the tax management services it provides in Custom Active is 10 bps on top of the fee charged by the research provider. If you are considering a Custom Active mandate, that is an addition, not an alternative. The full breakdown of what Parametric charges and how the Morgan Stanley layers sit on top is on our Parametric Custom Core page.

Aperio charges for what the portfolio tracks, not what strategy it is

Aperio's schedule works on a different axis and that is the single most useful thing to understand about it. There is one base rate, 0.35% for a US domestic benchmark index, and then two flat surcharges: five basis points for a foreign or global benchmark, and ten for a values-aligned screen. Domestic with a screen is 0.45%. Global with a screen is 0.50%.

Flat is the operative word. A $30 million mandate pays the same 0.35% as a $300,000 one on the filed schedule. There are no size breakpoints in the brochure at all, which is unusual in this business and cuts both ways. A small account gets the institutional rate. A very large account has no published tier to point at, and has to negotiate from scratch. The brochure says fees are "negotiable at the sole discretion of Aperio", which is a polite way of saying the filed number is a ceiling for anyone with leverage and a floor for anyone without it.

Aperio also reserves the right to charge more rather than less, disclosing that accounts may be charged additional fees for customization such as pass-through costs of licensing data for specialized indexes. Our Aperio direct indexing page goes through the whole filing, including the sub-advisory and wrap-sponsor rates that show where the real floor sits when the relationship is large enough.

Long and short: two different shapes of the same bill

If you are running an extension strategy, the pricing structures diverge properly and the comparison stops being like for like.

Parametric prices the extension as its own strategy. Custom Extension SMA is 40 bps with a $1,000,000 minimum, and the high leverage version is 58 bps with a $3,000,000 minimum. One number, one minimum, no arithmetic.

Aperio adds a Short Advisory Fee to the base rate instead: 0.20% at gross exposure up to 200%, rising to 0.40% between 200% and 300%. So a 200% gross US domestic account pays 0.35% plus 0.20%, or 0.55%, before margin interest and before short financing. For long or short strategies with certain factor tilts, Aperio charges a flat rate in place of the base fee: 0.45% up to 200% gross exposure and 0.90% above it. The brochure is unusually candid about the operational cost, listing margin and short selling costs, potential margin calls, tax considerations, and "limited custodian availability and custodian-specific requirements". That last item ends more of these conversations than the fee does.

The minimum is the real difference

Parametric publishes $250,000 for direct Custom Core, and $25,000 for the same strategy bought through a Morgan Stanley Select UMA. That $25,000 figure is the most consequential number in this entire comparison, because it is the only route in the adviser channel that puts an institutional direct indexing SMA within reach of an ordinary taxable account.

Aperio publishes nothing. Item 7 of its brochure says only that it requires a minimum account size for certain strategies, which varies among wrap programs, and no dollar figure appears anywhere in the filing. The concrete number you can verify comes from the platform side: Morgan Stanley's Select UMA profile for the Aperio ActiveTaxGlobalIndexing strategy lists a strategy minimum of $250,000. Treat any single flat "Aperio minimum" you read on a comparison site as a program minimum somebody copied, not a firm one.

The account data supports that reading. Aperio manages $152,125,253,086 across 33,901 accounts, which is about $4.49 million per account. That is not a mass-market book. Parametric's Custom Core S&P 500 composite on Select UMA alone consists of 16,665 accounts holding $19.8 billion, an average nearer $1.2 million, and that is one strategy on one platform.

Both manager fees are smaller than the stack on top

Here is the part that makes the 23-versus-35 basis point argument slightly beside the point. Neither of these firms sells to you directly, so the manager fee is one slice of a stack. The Morgan Stanley Select UMA profile discloses a maximum MS Advisory Fee of 0.50% quarterly, which is 2.0% a year, plus a separate SMA Manager Fee ranging from 0% to 0.1875% per quarter, or 0% to 0.75% a year. Aperio separately discloses that its fees from wrap sponsors currently range up to 0.40% depending on the product.

Negotiated accounts commonly pay far less than those ceilings, but the shape of the problem does not change: a twelve basis point difference at the manager level can be wiped out by a platform decision made in a different meeting. When you compare quotes, compare the all-in number or you are not comparing anything. Every published rate in the category, from 0.09% self-service accounts to a 1.700% private wealth schedule, is laid out on our direct indexing fees page.

Where each one is actually the better choice

Two things the fee comparison will not tell you

The first is that the whole cost stack is being spent on harvested losses the client has to be able to use. Providers advertise 1% to 2% of annual tax alpha. Wealthfront's own whitepaper, backtesting February 2015 to December 2025, puts the benefit at 0.18% to 0.44% a year of account value on the US stocks portion. If the client has no realized gains to offset, they are capped at deducting $3,000 a year against ordinary income, and an all-in fee north of 1% does not clear. Ask what gains exist before you ask what the manager charges.

The second is that neither manager can see the client's other accounts. Both disclose that they can trigger wash sales; Aperio's filing says one may be triggered under a number of conditions including managing tracking error and client requests such as deposits or withdrawals. Nothing in either mandate watches the client's 401(k) buying the same index fund twice a month, and where the replacement lands inside an IRA the disallowed loss is not deferred, it is forfeited outright. You can put a number on that with our wash sale calculator before it costs a client anything.

One practical note on keeping this comparison honest over time. Both of these schedules come from Form ADV Part 2A brochures that are amended annually, and the fee you diligenced at onboarding is not necessarily the fee on file two years later. Firms that treat that as a recurring obligation rather than a one-off check tend to run it through something that tracks obligations and maps them to controls, so the re-read happens on a schedule instead of when a client asks an awkward question.

The step most people skip

Before you choose between two managers who will both build a custom index for a client, it is worth knowing precisely which index you want built. The benchmark, the exclusions, the weighting scheme and the tracking error you are willing to accept are your decisions, not the manager's, and they change the answer to which manager fits. Specify the index first, test it against real market history, then take a defined mandate to the quote conversation rather than a vague brief. That is what this site is for: build the weighted index, backtest it, and track it against the benchmark before anyone charges you basis points to run it.

Sources

Parametric Portfolio Associates LLC, Form ADV Part 2A dated 03/31/2026, Items 5 and 8, read 2026-08-30. Aperio Group, LLC, Form ADV Part 2A dated 03/31/2026 and Form ADV Part 1A filed 2026-04-02, read 2026-08-20. Morgan Stanley Select UMA manager profiles for Parametric Custom Core S&P500 (PPA-7), information as of June 30, 2026, and for Aperio ActiveTaxGlobalIndexing. Tax figures: IRS Topic 409, IRC 1091 and IRS Revenue Ruling 2008-5. Tax alpha range: Wealthfront tax loss harvesting whitepaper, backtest February 4, 2015 to December 31, 2025. Indexes is not affiliated with, endorsed by or sponsored by Parametric Portfolio Associates, Morgan Stanley, Aperio Group or BlackRock.