Vanguard Group Appoints New CEO

Vanguard Group announced that former BlackRock Inc. iShares head Salim Ramji will take over as the firm’s CEO and a member of the board, effective July 8.

Ramji succeeds Tim Buckley, who will retire and step down as chairman and CEO of the Vanguard Group.

Ramji is the first external hire named to the post since the company’s founding in 1975 by John Bogle. The BlackRock executive will be the firm’s sixth CEO in the history of the Valley Forge, Pennsylvania-based asset manager and recordkeeper.

Salim Ramji

Tim Buckley

Ramji joins Vanguard after almost ten years at BlackRock. He started as global head of corporate strategy and took over iShares, the firm’s exchange-traded funds management arm, in 2019. He had previously been a senior partner with consultancy McKinsey & Company in charge of the firm’s asset and wealth management division.

“Salim is an exceptional leader who is aligned with Vanguard’s mission-driven culture, making him the ideal candidate,” Mark Loughridge, lead independent director of the board, said in a statement. “We have significant opportunities for growth ahead, including how technology and the client experience can drive solutions and extend the benefits of wealth management to more investors.”

When Ramji takes over as CEO, Loughridge succeed Buckley as board chair, taking the role of nonexecutive chair, according to the announcement. Greg Davis, president and CIO, will also join Vanguard’s board and have expanded oversight of regulatory and government affairs.

Buckley announced his intention to retire after holding the CEO post for six years, not noting any further career destination. He joined the firm as founder Bogle’s research assistant in 2001.

“I have worked with Salim on the Executive Committee of the Investment Company Institute,” Buckley said in a statement. “He cares about advancing the interests of individual investors, has a strong fiduciary ethos, and thinks strategically about solutions. Salim understands our organization’s deep sense of purpose and commitment to put clients first, which is a hallmark of Vanguard’s leadership team and culture.”

Vanguard and BlackRock are the country’s two most dominant players in workplace retirement plan portfolios across the country, both managing roughly $1.16 trillion in defined contribution investment only assets in the U.S., according to the most recent PLANADVISER DCIO Survey a sister publication of PLANSPONSOR. BlackRock holds a slight edge on Vanguard in that survey, with the closest competitor State Street Global Advisors accounting for a faraway $580 billion.

Vanguard is currently the country’s leading provider of target-date funds and a major player in passive investment strategies in defined contribution plans, according to data from ISS Market Intelligence’s Simfund, which, like PLANSPONSOR, is owned by ISS STOXX. BlackRock is currently the eighth largest provider of TDFs.

Vanguard noted in the announcement Ramji, as head of iShares & Index Investing, was responsible for managing “a majority of the firm’s client assets and evolving the iShares platform to provide an even broader set of innovative low-cost products for investors globally. His contributions led to expanded investment access for tens of millions of investors, a more central role for ETFs in retirement and wealth portfolios and a more efficient bond market with ETFs as an enabling technology.”

“Vanguard has invested heavily in its advice business and ETF lineup over the past several years,” Daniel Sotiroff, a senior manager research analyst for Morningstar Inc., wrote in a post about the hire. “Ramji accumulated a lot of experience in both areas at BlackRock, but it remains to be seen what his appointment means for Vanguard’s culture and direction.”

In April, BlackRock announced that its guaranteed income product LifePath Paycheck, which can be used as a qualified investment default alternative in defined contribution plans, is now available.

The asset manager is the leading provider of ETFs in the country, with Vanguard in second, according to Simfund.

BlackRock has been focusing of late on the workplace retirement plan space, with CEO Larry Fink focusing on expanding retirement savings access and bolstering retirement income offerings—including BlackRock’s new in-plan annuity LifePath Paycheck—in his annual letter released in March.

Vanguard’s move to hire Ramji breaks the tradition for Vanguard of hiring CEOs internally throughout its history. Under Buckley, the firm also made a rare move to acquire another firm, bringing on Just Invest in 2021, a direct index investing platform for financial advisers, PLANADVISER reported.