Vanguard Acquires Just Invest for Direct Indexing

Bats-Direct Edge Complete Merger

Vanguard 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, direct indexing offer.

“Technology-driven solutions such as direct indexing continue to reshape our industry, driving better investment outcomes and lowering costs for clients,” said Tim Buckley, Vanguard Chairman and CEO. “Wise investments in technology are an important equalizer, enabling us to democratize valuable investment capabilities and products. We are excited to welcome the Just Invest team and direct indexing capabilities to Vanguard to better serve our clients.”

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 management through its direct indexing platform, fostering greater client engagement and world-class economics for both financial advisors and their investors. The firm’s capabilities will augment Vanguard’s $3 trillion financial intermediary business, serving registered investment advisors (RIA), bank, and broker-dealer financial advisors.

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 needs1. In complement to Vanguard’s world-class product lineup, direct indexing can offer tax optimization benefits and serve as a values-based investing tool. Vanguard’s direct indexing offer will build upon a pilot program offered to its RIA clients over the past year and a half, powered by Just Invest.

“Investing is inherently personal, and advisors are looking to better serve their clients through more customizable and tech-driven solutions. The success of our pilot program validated both the need in the marketplace and the compelling offer developed by Just Invest,” said Tom Rampulla, managing director of Vanguard Financial Advisor Services. “We’ve put tremendous focus on our financial intermediary business 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.”

As Vanguard’s largest division, Financial Advisor Services has partnered with U.S. financial intermediaries for more than two decades, providing world-class investment products, research, and thought leadership. In recent years, the firm has 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. Through its acquisition of Just Invest and its innovative investment capabilities, Vanguard is poised to better serve advisors through broader, cost-effective access to tax-efficient, personalized investment solutions. Over time, Vanguard will work with the Just Invest team to expand its offer to a broader set of clients and build upon existing capabilities.

“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.”

The planned acquisition underscores Vanguard’s ongoing efforts to leverage both internal and external talent, resources, and capabilities to fuel innovative solutions that help to meet evolving client needs and drive better client outcomes. Vanguard was advised by PJT Partners and Cooley LLP, and the purchase is expected to be completed in the fourth quarter of 2021.

Source: Vanguard

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