Advisors must meet client demand for personalized investing because simply investing in funds may no longer be enough for many, according to Charles Schwab chief executive officer Walt Bettinger.

"Personalized investing is coming at all of us like a freight train," Bettinger said Tuesday at the Schwab Impact 2021 conference.

"The idea that I'm going to take my money and simply turn it over to some fund or an ETF and trust that that index is going to invest the way I want, I won't go so far as to say those days are gone because I don't think that they're gone, maybe they're not numbered, but they're going to be challenged," he added.

Personalization — such as via direct indexing and thematic investing — is the "future of investing," according to Bettinger.

Direct indexing gives clients broad exposure to an asset class, such as large-capitalized equities. But rather than buy a mutual fund or exchange-traded fund, investors own the individual stocks that comprise an index. The customization comes in when advisors tweak which index components they buy — or don't buy — and in what proportions.

Schwab itself recently began piloting direct indexing, according to FA-IQ sister publication Ignites. The direct-indexing program, Schwab Personalized Indexing, is for individuals with at least $100,000 in investable assets and will be available within Schwab's taxable managed account programs, according to the publication.

Thematic investing, meanwhile, aims to identify trends and the investments that could benefit from those trends. A total of 27 thematic ETFs debuted in the second quarter, according to State Street Global.

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