Mortimer ‘Tim’ Buckley, Vanguard’s Visionary

(Bloomberg Businessweek) -- For the first time, more money is now held in passive U.S. equity funds (which follow an index) than in ones that stockpickers manage. Vanguard has $4.4 trillion, or 75% of its $5.9 trillion in total assets, in passive funds, which trails only BlackRock. And as competitors have started slashing their fees to attract investors—last year, Fidelity announced the industry’s first zero-fee index fund—Buckley, who became Vanguard’s chairman in January, is tacking in the other direction. He wants to expand his company’s reach by offering more investment advice, pointing out that many of the 10,000 baby boomers retiring daily will want advisers to help them manage their money. In September, Vanguard filed a plan with regulators for a robo-advising service that would charge half its current fee for advice. The company is also developing a software service for registered independent advisers to compete directly with services run by Fidelity and Charles Schwab Corp., a rivalry becoming more cutthroat amid Schwab’s deal to buy TD Ameritrade Holding Corp. for $26 billion.

To contact the editor responsible for this story: Bret Begun at bbegun@bloomberg.net, Claire SuddathJeremy Keehn

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