Vanguard announced Tuesday that 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.”
Direct indexing is a custom investment portfolio that mirrors the composition of a particular index.
“Technology-driven solutions such as direct indexing continue to reshape our industry, driving better investment outcomes and lowering costs for clients,” Tim Buckley, Vanguard Chairman and CEO, said in a statement. “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.
According to the companies, 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 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.
Benefits
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.
“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,” Jonathan Hudacko, CEO of Just Invest, concluded. “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.”
With more than 20 years serving financial markets, John Sullivan is the former editor-in-chief of Investment Advisor magazine and retirement editor of ThinkAdvisor.com. Sullivan is also the former editor of Boomer Market Advisor and Bank Advisor magazines, and has a background in the insurance and investment industries in addition to his journalism roots.
