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Is Ramji a Boglehead? Will Vanguard focus on cryptocurrencies?
Is Ramji a Boglehead? Will Vanguard focus on cryptocurrencies?
Salim Ramji
The appointment of Salim Ramji to lead Vanguard Group, a company whose ETFs and mutual funds hold trillions of investors’ dollars around the world, could represent a turning point in the history of the nearly 50-year-old asset manager that has recently been criticized for its technology, customer service and refusal to sell spot bitcoin ETFs.
Then again, maybe not.
The appointment of Ramji, 53, appears to have shocked few Vanguard observers. ETF industry watchers, including Bloomberg’s Eric Balchunas, said the former BlackRock Inc. executive was on the list of candidates to replace Tim Buckley, the longtime Vanguard employee who announced in March that he would be leaving after six years as CEO.
However, Ramji’s appointment brought with it at least one surprise: he is the first outsider appointed to run the company, which has assets of $9.3 trillion and 50 million investors. The Malvern, Pennsylvania-based company has $2.56 trillion in 86 exchange-traded funds, second to iShares’ $2.77 trillion.
Ramji may share a former connection with Vanguard: etf.com columnist and financial advisor Allan Roth said Buckley had praised McKinsey & Co. in a conversation with him, and Ramji had once led the wealth and wealth management practice by McKinsey.
“If McKinsey was working with Vanguard then, it may have been known to the Vanguard Board,” Roth said in an emailed comment.
Bogleheads, Vanguard Customer Service
Ramji praised Bogle in Balchunas’ 2022 book “The Bogle Effect,” when he was at iShares: “Bogle had incredible clarity of vision and was a great advocate for individual investors… We spend a lot of time making investing more accessible and affordable, and I think if Bogle were alive, he would approve,” Balchunas posted on X. Balchunas told etf.com yesterday that Ramji is a “kind of Boglehead at heart.”
In the wake of Buckley’s announcement of his exit, complaints surfaced about the company’s customer service and technology issues. Some saw these problems as part of the deal when they held an account at a company known for offering low-fee mutual funds and ETFs. However, some would like to see a change.
“I hope he will focus on improving technology and customer service,” Roth said.
Will the next step be a Vanguard Bitcoin ETF?
Ramji’s arrival potentially marks a change in cryptocurrency stance at Vanguard, which declined to offer bitcoin spot ETFs on its platform after starting trading in January. Ramji was instrumental in BlackRock’s launch iShares Bitcoin ETF (IBIT), which in March set the milestone of reaching $10 billion faster than any other ETF. Buckley, who announced his retirement on March 1, reiterated his opposition to spot bitcoin ETFs days later, saying the assets need to change and that they don’t belong in a long-term portfolio.
The story continues
However, change is afoot, and Ramji will be tasked with leading the massive company into a future that could include digital tokenization of assets, lower costs, and increasing competition.
“The culture already seems to be changing a bit with the addition of commissions and the closing of lines of business,” said Jeff DeMaso, editor of The Independent Vanguard Adviser newsletter. “It will have to take significant steps to improve technology and service issues.”
The company may be in the right place for the change, said Adam Dell, founder and CEO of New York-based Domain Money Advisors.
“The wave of increasing access by eliminating unnecessary fees and high minimums is only growing in strength,” he said. “Even anachronistic elements of financial planning, such as AUM fees, are under attack.”
Jeff Benjamin, editor of etf.com Wealth Management, contributed to this article.
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