After posting its most successful fund-sales year ever,
The Vanguard Group Inc. is reshuffling its U.S. leadership ranks, including the division that competes for the attention of third-party financial advisers.
Thomas M. Rampulla, who helped the fund manager develop its now-booming adviser and ETF sales business back in the early 2000s, is coming back to lead that unit after a stint atop the manager's fast-growing European business.
The 27-year veteran and former portfolio manager will replace Martha G. King as managing director of Financial Advisor Services. Ms. King has led the unit since it was formed in 2002. In that time, it has been a huge source of growth for Vanguard, especially for its lineup of exchange-traded funds. Advisers account for $1 trillion of the firm's $3 billion in assets.
Ms. King, 51, is moving to a new role as head of the Vanguard Institutional Investor Group. The incumbent in that position, Chris D. McIsaac, 40, will take over the firm's planning and development unit, whose director, Michael S. Miller, 63, is retiring.
While Vanguard has long eschewed common brokerage industry practices, for instance not paying brokers or their firms to distribute its product, its business of promoting low-cost, often index-tracking funds has nonetheless thrived along with the growth of advisers, who are now paid more often directly by clients rather than by investment firms whose products they sell.
Last year, of the $214.5 billion that Vanguard took in, advisers drove $1 of every $2.
“Vanguard's Financial Advisor Services division is one of our fastest growing businesses, and Tom will bring his vast knowledge and understanding of the investment advisor industry to build on that momentum,” said Bill McNabb, Vanguard's chief executive, in a statement Tuesday. “Tom will continue to focus on Vanguard's efforts to promote the value of investment advice and to expand the use of Vanguard's low-cost ETFs and mutual funds among our advisor clients.”
Both Mr. Rampulla, 49, and Karin A. Risi, another Vanguard veteran now being installed in a top position, will report directly to Mr. McNabb as part of an 11-person leadership team.
Ms. Risi, 42, is taking over the firm's largest unit from the retiring Paul A. Heller, 53. That unit serves retail investors directly, including through the
Vanguard Personal Advisor Services offering, which combines virtual investment guidance and telephone support from financial planners. That service, which now manages $10 billion in assets, is being officially released later this year after a lengthy pilot-test.
Vanguard has firmly become the top mutual fund manager in a market that has challenged the top active managers, including
Fidelity Investments and
American Funds, its closest competitors in mutual funds, who have struggled to stanch outflows in recent years. Vanguard's ETF business is second to
BlackRock Inc.'s
iShares.
