Skip to Content
Morningstar

Vanguard's Buckley: 'There's No One Even Close to Us'

Vanguard's CEO on balancing growth with delivering good client outcomes, the future of advice, and the trend toward "free" products.

, and

Listen Now: Listen and subscribe to Morningstar's The Long View from your mobile device: Apple Podcasts | Spotify | Google Play | Stitcher

Our guest in this special bonus episode of The Long View podcast is Tim Buckley, chairman and CEO of the Vanguard Group, which manages over $5 trillion in assets globally. Tim took the helm at Vanguard in January 2018, succeeding Bill McNabb. Tim is a longtime Vanguard veteran, having joined the firm in 1991. Before assuming his current role, he served as Vanguard's chief investment officer, head of its retail investor group, as well as its chief information officer. In this mini episode, which was recorded live at the 31st annual Morningstar Investment Conference in Chicago, we discuss the significance of Vanguard's recent Morningstar Award for Investing Excellence, which the firm received for exemplary stewardship. Tim also addressed how Vanguard attempts to balance growth with delivering good outcomes to clients, its capital allocation philosophy and key initiatives, the future of advice, the trend toward "free" funds, as well as the firm's recent forays into sustainable investing, among other topics.

Show Notes "It's the core of Vanguard": What stewardship and investor-centricity has meant to the firm (0:28-1:20) Defining "client": How Vanguard balances off the objectives of its different lines of business (1:21-2:51) Incredible scale can't be taken for granted: Is it enough to just be a fund company? (2:52-4:15) Gazing into our crystal ball: What Vanguard looks like in 10 years and how that compares to today (4:16-5:30) Goal-setting: How Vanguard defines success and how that informs the way they run the business (5:31-6:40) The future of advice: "I can't imagine anything but the price (for advice) coming down" (6:41-7:24) Embrace technology and personalize: Tim's counsel to advisors who are trying to adapt to falling advice fees (7:25-8:43) "There's no one even close to us": What matters in a "freemium" world is the cost of the whole portfolio (8:44-10:12) Pathways to growth: The future of ESG funds and factor investing and how Vanguard tries to position these strategies to advisors and other markets (10:13-12:40) "All the money flowing to index funds--it's not because active doesn't work. It's because high-cost active doesn't work" (12:41-14:31) "You can have your cake and eat it, too, in the active ESG approach": How to succeed with ESG investing (14:32-16:22) Best practices: How Vanguard settled on its approach to ESG investing (16:23-17:02) "We've looked": Vanguard's approach to capital investment and answering the build-vs.-buy question (17:03-18:26) "Vanguard is defined by its structure, and we're going to keep it": Tim on why Vanguard will never de-mutualize (18:27-19:20) References Tim Buckley, chairman and CEO, The Vanguard Group 2019 Morningstar Awards for Investing Excellence: Nominees for Exemplary Stewardship Winners of the 2019 Morningstar Awards for Investing Excellence Vanguard founder John "Jack" Bogle Vanguard's mutual ownership structure, explained Vanguard funds snapshot page Analyst-rated Vanguard Funds Analyst-rated Vanguard ETFs "Investing Crosses the Rubicon: Free Index Funds" "Vanguard: Competitors' Pricing Behavior is Inconsistent" "2018 Morningstar Fee Study Finds that Prices Continue to Decline" "Vanguard: Cost of Advice Could Fall Further"

About the Podcast: The Long View is a podcast from Morningstar. Each week, hosts Christine Benz and Jeff Ptak conduct an in-depth discussion with a thought leader from the world of investing or personal finance. The podcast is produced by George Castady and Scott Halver.

About the Hosts: Christine Benz and Jeff Ptak have been analysts and commentators on investments and the investment industry for many years. Christine is Morningstar's director of personal finance and senior columnist for Morningstar.com. Jeff is head of global manager research in Morningstar Research Services, overseeing Morningstar's team of 120 manager research analysts in the U.S. and overseas.

To Share Feedback or a Guest Idea: Write us at TheLongView@morningstar.com.

Previous Episodes Episode 1: William Bernstein: 'I Don't Think the System Needs Nudges. It Needs Dynamite.'

Episode 2: Don Phillips: 'We're All in the Behavior-Modification Business'

Episode 3: Morgan Housel: 'No One Hires a Luck Manager'

More in Retirement

About the Authors

Jeffrey Ptak

Chief Ratings Officer, Research
More from Author

Jeffrey Ptak, CFA, is chief ratings officer for Morningstar Research Services LLC, a wholly owned subsidiary of Morningstar, Inc.

Before assuming his current role, Ptak was head of global manager research. Previously, he was president and chief investment officer of Morningstar Investment Services, Inc., an investment unit that provides managed portfolio services through fee-based, independent financial advisors, for six years. Ptak joined Morningstar in 2002 as a senior mutual fund analyst and has also served as director of exchange-traded fund analysis, editor of Morningstar ETFInvestor, and an equity analyst. He briefly left Morningstar to become an investment products analyst for William Blair & Company, and earlier in his career, he was a manager for Arthur Andersen.

Ptak also co-hosts The Long View podcast with Morningstar's director of personal finance and retirement planning, Christine Benz. A full episode list is available here: https://www.morningstar.com/podcasts/the-long-view. You can find him on social media at syouth1 (X/fka 'Twitter') and he's also active on LinkedIn.

Ptak holds a bachelor’s degree in accounting from the University of Wisconsin and the Chartered Financial Analyst® designation.

Christine Benz

Director
More from Author

Christine Benz is director of personal finance and retirement planning for Morningstar, Inc. In that role, she focuses on retirement and portfolio planning for individual investors. She also co-hosts a podcast for Morningstar, The Long View, which features in-depth interviews with thought leaders in investing and personal finance.

Benz joined Morningstar in 1993. Before assuming her current role she served as a mutual fund analyst and headed up Morningstar’s team of fund researchers in the U.S. She also served as editor of Morningstar Mutual Funds and Morningstar FundInvestor.

She is a frequent public speaker and is widely quoted in the media, including The New York Times, The Wall Street Journal, Barron’s, CNBC, and PBS. In 2020, Barron’s named her to its inaugural list of the 100 most influential women in finance; she appeared on the 2021 list as well. In 2021, Barron’s named her as one of the 10 most influential women in wealth management.

She holds a bachelor’s degree in political science and Russian language from the University of Illinois at Urbana-Champaign.

Sponsor Center