Vanguard launches Canadian business

The Pennsylvania-based investment management company, Vanguard, has opened a Canadian arm—Vanguard Investments Canada Inc.

“Extending our reach to the Canadian market in a significant way is an important step in the development of our global business,” said Vanguard chair and CEO William McNabb. “Although Canada has a very well-developed asset management market, we believe our unique value proposition of low-costs, client alignment, and enduring investment solutions will resonate with Canadian investors.”

The Canadian operation, based in Toronto will be lead by Atul Tiwari, former BMO Financial Group executive and Harris Insight Funds president and CEO.

“As more and more advisors move to a fee-based model, our product and our approach complements that,” he says. “With our approach—we don’t pay for distribution—the primary focus of the wholesale effort will be on fee-based advisors. We recognize that’s about 30% of IIROC advisors, but if you look at the U.S. about 10 years ago, they were at the same level and today they’re about 50 or 65% fee-based. This is about the future.”

Vanguard’s business structure allows it to keep investor costs low; the company is owned by the funds that it manages, so clients are, in fact, the owners of the asset manager.

“As a result, we’re able to put the clients’ interests first in everything we do, since the clients are the owners. Once all of the profits are brought in over the cost of operating, those are returned back to the fund holders in the form of lower expenses.”

Because prospectuses are yet to be filed, Tiwari is unable to provide much detail as to the funds’ structures (trust, corporate or ETF), or what the initial mandates will be.

“We do expect to file our prospectus for products some time in the next few months,” he says.

He says the firm plans to bring on 10 to 15 staff “in the near term” but investment management duties will remain in the Malvern Pennsylvania head office.

“Vanguard runs a number of global strategies out of Malvern, so we’re pretty confident that approach will work [for any Canadian mandates],” Tiwari says.

Staff

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