Vanguard's McNabb: 'We are a technology company " with 3,000 engineers

Tom Paine

Follow @phillytechnews

 Subscribe in a reader




Whenever Vanguard Group CEO Bill McNabb talks, people listen.

Not only because Valley Forge-based Vanguard is the monster of the mutual funds business, with assets under management of about $3.4 trillion. But also because McNabb himself  is seen as a key influencer in the global financial services industry.

And at a Morningstar Investment conference on Wednesday, he made news in several areas. Not the least of which was the technology front. The trade website RIABiz quotes him as saying in a side talk after his main address, "We are a technology company", citing  its 3,000 person strong engineering force ( though I don't think he meant it was Vanguard's primary strength).  McNabb discusses a recent visit he and some other top Vanguard executives made to Silicon Valley:

“I mentioned I was really intrigued by some of the software development that we saw in Silicon Valley among the robo-advisors,” he says. “So we are working hard on how do we get that kind of capability within the firm to do more cutting edge? We have great technologists, but you know we are running big platform, legacy systems, so how do you develop something for this in three months the way you would see out of the Valley?


Vanguard has a startup product called 'Vanguard Personal Advisor Services' which is considered a hybrid, part algorithm-based robo and part high touch, personal call center assistance, and has had a very successful launch.  Of the independent, robo-based startups, of which Wealthfront and Betterment are best known, Vanguard is considered closest to Wealthfront, at least in terms of investment philosophy.

McNabb later added, "We are watching Alibaba in China very closely, and they have entered a space and done so very successfully,”
RIABiz reported.