Vanguard stumbles in pivot from cult of Jack Bogle

Jack Bogle is gone. But head west from Philadelphia, toward the leafy borough of Malvern, Pennsylvania, and turn onto the Vanguard Group campus. There’s old Jack, cast in bronze, surveying his singular creation: Vanguard, the mutual-fund giant that changed everything.

Jack Bogle is gone. But head west from Philadelphia, toward the leafy borough of Malvern, Pennsylvania, and turn onto the Vanguard Group campus. There’s old Jack, cast in bronze, surveying his singular creation: Vanguard, the mutual-fund giant that changed everything.

At Vanguard’s headquarters, 117 miles and a world away from Wall Street, Bogle’s figurative heirs are charting new paths for his quirky company, that great popularizer of low-cost index funds. 

The changes might seem quintessentially Vanguardian: slow, steady, even a bit boring. But to diehard fans, what’s at stake is the very soul of Vanguard, a colossus that oversaw US$8 trillion at the end of February. Only BlackRock Inc. manages more.

Chief Executive Officer Tim Buckley is trying to move beyond parts of the revered founder’s playbook, and rouse the sometimes-sleepy Vanguard. 

Courting suspicion from traditionalists, Vanguard is pushing ever deeper into financial advice, known internally as “Engine No. 2” of growth. It’s giving wealthier clients and advisory customers the velvet-rope treatment, in contrast to Bogle’s everyman ethos. With scant notice, it’s quintupled the minimum balance required for one personalized service to US$5 million. 

“I don’t think Bogle would have done a number of these things,” said John Rekenthaler, vice president of research for Morningstar Inc.