Vanguard adds online offerings aimed at advisers

PHILADELPHIA — As part of its ongoing efforts to appeal to financial advisers, The Vanguard Group Inc. has added several features to its adviser website.
The new features, which were added late last year and are free to registered advisers, focus primarily on practice management. They are designed to help advisers attract new clients, manage existing clients, run their practices and develop themselves professionally.
For example, Malvern, Pa.-based Vanguard now provides advisers with access to surveys to help them gauge client satisfaction. Vanguard, in partnership with Quest Continuing Education Solutions in Brookfield, Wis., also provides online services to allow advisers to earn education credits.
The new features are the result of conversations Vanguard had with advisers about its online adviser service, which made its debut in the summer of 2005, said Bert S. Dalby, a principal with Vanguard.
Advisers said, “If we’re going to work with you, you need to think more broadly,” he said.
New offerings fall short
Maybe so. But industry critics contend that the new features fail to go beyond what other firms also are doing and are unlikely to attract advisers.
“They are providing the minimal amount to stay on top of [the adviser] channel,” said Daniel Wiener, the Brooklyn, N.Y.-based editor of The Independent Adviser for Vanguard Investors, a monthly newsletter.
Vanguard got out of the business of servicing advisers in 2003 when it stopped providing them with custody services, he said.
Now Vanguard is in competition with advisers, Mr. Wiener said, referring to the fact that it has its own advisory operations.
Vanguard, for its part, does not view itself as competing with advisers, said Martha G. Papariello, a principal with the company.
Vanguard views advisers as being important to what it does, and its decision to exit the custody business was driven by the fact that it had never attained top billing as a provider of custody services to advisers, she said.
Making waves
There’s no doubt, however, that Vanguard has made waves in providing advice.
InvestmentNews reported in September that Vanguard is churning out 4,000 online plans a month.
But such advice isn’t anything a “serious” adviser should view as competition, said Charles “Chip” Roame, managing principal of Tiburon (Calif.) Strategic Advisors LLC.
Indeed, Vanguard’s advice offering isn’t keeping Richard Schroeder, executive vice president of Schroeder Braxton & Vogt Inc., a financial advisory firm in Amherst, N.Y., up at night.
In fact, by playing up the personal service his clients get, he is able to use Vanguard’s less-personal approach to his advantage when courting prospective clients, he said.
Even though he’s a fan of Vanguard’s mutual funds, he has yet to use Vanguard’s website for advisers, Mr. Schroeder said. He has, however, found similar online services from such asset managers as Pacific Investment Management Co. LLC in Newport Beach, Calif., adviser to the Pimco Funds group, and Oppenheimerfunds Inc. of New York.
Vanguard, of course, is not the only asset manager to bolster its online services for advisers.
“We’re seeing an increase with asset managers and other product providers providing other services to distinguish themselves,” said Bing Waldert, an associate director with Cerulli Associates Inc. of Boston, an industry consultant.
As a result, such services no longer are as unique as they once were, Mr. Roame said.
“Everyone has a practice management website,” he said.
That doesn’t mean, however, that Vanguard is wrong to provide such services, Mr. Roame said.
If anything, it shows that Vanguard understands the needs of advisers, he said.
“It shows that they get it,” Mr. Roame said.