Frec Review

Company background

Frec is a US fintech company founded in 2021 and headquartered in San Francisco, California. The company launched publicly in late 2023 and operates through two wholly owned subsidiaries: Frec Advisers LLC, an SEC-registered investment adviser, and Frec Securities LLC, an SEC-registered broker-dealer and FINRA member. The founding team came from prominent technology companies and built the platform with the goal of making direct indexing accessible to a broader range of investors, a strategy previously reserved for high-net-worth individuals at large wealth management firms.

Frec Markets, Inc. raised $26.4 million in a Series A funding round led by Greylock in October 2023. Client assets are held with third-party custodian Apex Clearing Corporation, one of the largest US custodians by assets.

Fees and pricing

Frec charges an annual advisory fee starting at 0.09% for the S&P 500 direct indexing strategy, with a $20,000 minimum investment. Fees vary by strategy, ranging up to 0.35% for niche indices such as the MVIS US Listed Semiconductor 25. Specialized strategies with higher complexity, such as Factor Tilt and Long Short 140/40, carry fees of 0.50%-1.10% with minimum investments of $100,000-$500,000. Frec charges no trading commissions on stocks or ETFs. A 0.20% annual fee applies to the Treasury account. Mutual fund trades cost $20 per transaction, domestic wire transfers cost $25, and outgoing account transfers cost $75. No account opening, maintenance, or inactivity fees are listed.

Regulation and safety

Frec Securities LLC is a registered broker-dealer with the SEC and a FINRA member. Frec Advisers LLC is an SEC-registered investment adviser acting as a fiduciary. Frec Securities is a member of SIPC, which protects customer securities up to $500,000, including $250,000 for cash claims. Client funds and securities are held at Apex Clearing Corporation, a third-party custodian, and are not held on Frec's own balance sheet. Frec Securities acts as an introducing broker-dealer, with Apex serving as the clearing firm.

Platform experience

Frec's platform is available on web and via iOS and Android mobile apps. The dashboard shows each index trade, the logic behind it, and tracking error versus the benchmark. Investors can customize their direct indexing portfolios by excluding up to two sectors or adjusting up to ten individual stocks. Frec offers over 20 direct indexing strategies covering US large-, mid-, and small-cap indices, sector-specific indices, ESG-screened indices, a Shariah-compliant index, and international exposure through ADR-based strategies tracking MSCI EAFE, MSCI World, MSCI ACWI, and S&P Developed and Emerging Markets. Automated features include daily tax-loss harvesting, automatic portfolio rebalancing, and dividend reinvestment. A portfolio line of credit allows investors to borrow up to 70% of the account value at a variable interest rate. The Treasury account holds uninvested cash in money market mutual funds.

Pros and cons

Frec's main advantages are its low advisory fee starting at 0.09%, a $20,000 minimum that is lower than many competing direct indexing platforms, automated daily tax-loss harvesting, and a transparent trade log. The Treasury account and portfolio line of credit add utility for investors managing larger taxable accounts. The main drawbacks are the absence of human financial adviser support, the inability to transfer fractional shares out in kind, and fees for mutual fund trades and wire transfers.