Frec

Frec is a San Francisco-based financial technology company established in 2021 by founder and CEO Mo Al Adham. Al Adham, a serial entrepreneur who previously founded Twitvid and served as a product leader at Twitter, was inspired to create Frec after being pitched direct indexing by wealth advisors and realizing the potential to build a more efficient, lower-cost solution himself. The company aims to make sophisticated investment strategies, traditionally exclusive to high-net-worth individuals via wealth managers, accessible to a broader audience of financially-savvy, self-directed investors.

The firm operates on a direct-to-consumer model, providing its services through a modern, self-service platform and mobile app. Frec has two main subsidiaries: an SEC-registered investment adviser (Frec Advisers LLC) and an SEC-registered broker-dealer that is a member of FINRA (Frec Securities LLC). In October 2023, the company emerged from stealth with $26.4 million in combined seed and Series A funding, with Greylock leading the investment. By August 2024, Frec announced it had reached $100 million in customer assets.

Frec’s core product is its direct indexing service, which allows customers to directly own the individual stocks of an index, such as the S&P 500, rather than investing through an ETF. This approach facilitates daily tax-loss harvesting at the individual stock level, a strategy that can capture more losses to offset capital gains compared to ETF-level harvesting. The company charges a competitive annual advisory fee starting at 0.09% for this service, with a minimum investment of $20,000 for most indices. Beyond its flagship product, Frec offers several other services. The Frec Treasury account provides a high-yield option for uninvested cash by investing in money market mutual funds. The platform also features portfolio lines of credit, enabling clients to borrow against their stock holdings at competitive interest rates without a complex underwriting process. Additionally, Frec supports individual stock and ETF trading with zero commission fees and has partnered with AngelList to provide money market funds for venture capital firms.

Keywords: direct indexing, tax-loss harvesting, investment platform, fintech, portfolio line of credit, wealth management, high-yield treasury, self-directed investing, passive investing, Mo Al Adham, Greylock, financial technology, automated investing, S&P 500 indexing, stock investing, SEC registered adviser, FINRA member, Apex Clearing, custom portfolios, tax efficiency