July 13, 2021 | Company News

Vanguard to offer direct indexing solution

Vanguard today announced it has entered into a definitive agreement to acquire Just Invest, a provider of tax-managed, tailored wealth management technology, including Kaleidoscope™—a highly customizable, personalized indexing (also known as direct indexing) offer. With Just Invest's innovative investment capabilities, Vanguard can provide advisors and their clients broader, cost-effective access to tax-efficient, personalized investment solutions.

"Investing is inherently personal, and advisors are looking to better serve their clients through more customizable and tech-driven solutions," said Tom Rampulla, managing director of Vanguard Financial Advisor Services™. "We've put tremendous focus over the last decade to serve as a trusted and strategic partner to advisors. We are confident that Just Invest's direct indexing capabilities will be a valuable complement to our ongoing efforts to help advisors redefine and underscore their client value proposition."

Just Invest's platform uses sophisticated portfolio management tools traditionally available only to institutional or ultra-high-net-worth investors. The approach can support a high degree of portfolio customization, providing advisors with the ability to personalize investment portfolios to reflect investors' values, financial objectives, and tax-loss-harvesting needs.1 In complement to Vanguard's world-class product lineup, direct indexing using Just Invest's capabilities can provide advisors' clients' with tax optimization benefits and values-based investing options.

Founded in 2016, Just Invest saw accelerating new asset growth in the first half of 2021, as assets under management surpassed $1 billion. Just Invest leverages large-scale data analysis, quantitative algorithms, and risk modeling to deliver scalable portfolio and tax-loss harvesting through its platform, fostering greater client engagement and best-in-class economics for both advisors and their investors.

"Since our founding, Just Invest's mission has been to empower financial advisors through modern and scalable custom asset management technology like direct indexing, enabling them to focus on what matters most—their clients," said Jonathan Hudacko, CEO of Just Invest. "With Vanguard's tremendous brand, reach, and investment leadership, we will be able to help even more advisors drive better investment outcomes for their clients."

As Vanguard's largest division, Financial Advisor Services has partnered with advisors for more than two decades, providing world-class investment products, research, and thought leadership. In recent years, we've continued to make significant investments to best serve the evolving needs of advisors and their clients, including new model portfolio capabilities and strategies, as well as portfolio analytics tools and consultations to augment financial planning.

The acquisition is expected to be complete in the fourth quarter of 2021.

 

This article was updated on October 1, 2021.

 

Notes:

1 Tax-loss harvesting involves certain risks, including, among others, the risk that the new investment could have higher costs or perform worse than the original investment and could introduce portfolio tracking error into accounts. There may also be unintended tax implications. We recommend consulting with a tax advisor before taking action.
  • All investing is subject to risk, including possible loss of principal.
  • Diversification does not ensure a profit or protect against a loss.
  • The information contained herein does not constitute tax advice, and cannot be used by any person to avoid tax penalties that may be imposed under the Internal Revenue Code. Each person should consult an independent tax advisor about his/her individual situation before investing in any fund or ETF.
  • Just Invest, LLC ("Just Invest"), an SEC registered investment adviser, is an independently operated wholly-owned subsidiary of The Vanguard Group, Inc. ("Vanguard"). Kaleidoscope™ is an asset management technology that has been developed and is offered solely by Just Invest.
  • For more information on Just Invest and Kaleidescope, and to access Just Invest’s Form ADV Part 2A disclosure brochure, please visit https://www.justinvest.com.  
  • © 2021 Just Invest, LLC. All rights reserved. Privacy policy: https://www.justinvest.com/privacy-policy/.