Vanguard Investments is going to tender, for the first time since it opened up in Australia, in a review of its securities services partner. It’s an historic moment. For JP Morgan, the incumbent provider, Vanguard was its first daily-pricing client here in the 1990s.
Vanguard will assess an RFP (request for proposal) in the first quarter of next year for custody and fund accounting services. The contract, covering more than $100 billion, is an important one because Vanguard is one of the largest managers in the fast-growing SMSF space due to its index funds and ETFs.
In an interesting twist, the senior global banking relationships executive who was due to come to Australia from the US this week, Kaitlyn Holmes, had to cancel her visit. Vanguard stopped all international travel for its executives until next year, following the US Government’s general travel advisory note.
It is not yet known whether the firm has appointed an Australian-based consultant to the review process. A spokesperson said Vanguard did not comment on current RFPs.
Vanguard launched in Australia in 1996, coming late to the party after State Street and the former Barclays Global Investors (now BlackRock), as well as some boutique offerings such as UBS and Macquarie, had launched indexed and enhanced index (smart beta) offerings in the late 1980s and early 1990s.
Jeremy Duffield, an Australian who had worked for Vanguard in the US and who has recently become a fintech entrepreneur in his own right, launched the business and insisted on the daily liquidity – a first for this market with an outsourced securities servicing provider.
Duffield left Vanguard in 2010, after a 24-year association with the group, and has recently become involved as shareholder and director with the online financial education company SuperEd. He is also a director of MLC Wealth Management and the Australian Centre for Financial Studies.
* Greg Bright is publisher of Investor Strategy News (Australia)