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Vanguard Buying Direct Indexing Firm Just Invest

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What You Need to Know

  • Terms of the acquisition were not disclosed, and it is expected to close in the fourth quarter.
  • Just Invest uses sophisticated portfolio management tools to personalize investment portfolios.
  • Its acquisition by Vanguard will help the fund giant better serve the clients of financial advisors.

Vanguard has entered into a definitive agreement to acquire Just Invest, a provider of tax-managed, tailored wealth management technology, including Kaleidoscope, which is a highly customizable, direct indexing offer.

The purchase, whose terms were not disclosed, is expected to be completed in the fourth quarter of 2021.

“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, in a statement. “We are excited to welcome the Just Invest team and direct indexing capabilities to Vanguard to better serve our clients.”

Vanguard had been engaged in a pilot program powered by Just Invest that was offered to RIA clients over the past year and a half, offering tax optimization benefits and serving as a values-based investing tool.

“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, in a statement.

Just Invest, founded in 2016, has more than $1 billion in assets, and uses sophisticated portfolio management tools traditionally available only to institutional or ultra-high-net-worth investors to personalize investment portfolios to reflect investors’ values, financial objectives, and tax-loss-harvesting needs.

Its capabilities will augment Vanguard’s $3 trillion financial intermediary business, helping the fund giant better serve advisors through broader, cost-effective access to tax-efficient, personalized investment solutions, according to Vanguard. Over time, Vanguard will work with the Just Invest team to expand its offering 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, in a statement. “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.”