Valley Forge, Pa.-based Vanguard today announced that it has completed its acquisition of Oakland, Calif.-based RIA fintech Just Invest and has plans to roll out direct indexing capabilities to advisors.
Vanguard has cooperated in a joint direct-indexing pilot program for RIAs with Just Invest since 2020, using the fintech’s data analysis, data algorithms and risk-modeling capabilities. It initially agreed to acquire Just Invest in July.
“Financial advisors understand that each client’s circumstances and values are personal,” said Tom Rampulla, managing director of Vanguard Financial Advisor Services, in released comments. “We are excited to integrate Just Invest’s personalized indexing offering into our intermediary business and help advisors unlock new ways to tailor client experiences and provide value.”
Just Invest, founded in 2016, offers tax-managed wealth management technology including Kaleidoscope, its direct indexing platform. Vanguard plans to use the acquisition to augment the products and services it makes available through advisors, thus the direct-indexing capabilities will first be implemented through the asset manager’s financial intermediary business.
According to previous Vanguard releases, Just Invest’s AUM surpassed $1 billion during the first half of 2021; by comparison, Vanguard has a $3 trillion business working with financial intermediaries.
The technology could help those advisors affiliated with Vanguard offer personalized, highly tax-efficient investment solutions to clients at a price point in keeping with Vanguard’s low-cost approach. Customized, direct indexes may also make it easier for advisors to offer socially responsible and environmental social and corporate governance (ESG) investment strategies.
Additional details of the transaction were not made availale.