Pennsylvania-based investment behemoth Vanguard, which is the world’s second-largest asset manager, is buying Just Invest, a 5-year-old startup whose technology helps advisers customize portfolios. Terms of the deal were not disclosed.

Why should we care?
The transaction marks Vanguard’s first acquisition. It’s also a way the 46-year-old investment giant can strengthen relationships with financial advisers through Just Invest’s offerings. Vanguard is known for its low-cost funds that track indexes. By contrast, Just Invest’s tools allow investors and advisers to build personalized portfolios. “We are confident that Just Invest's direct indexing capabilities will be a valuable complement to our ongoing efforts to help advisors redefine and underscore their client value proposition,” Tom Rampulla, managing director of Vanguard Financial Advisor Services, said in a statement. Vanguard, which has $7.9T in assets, sees $3T come through advisers, brokerages, and other intermediaries. Vanguard said the acquisition was part of a bigger effort to tap internal and external talent to meet evolving client needs and achieve better outcomes. The company is in the midst of broadening its approach, keeping with CEO Tim Buckley’s earlier comments showing interest in direct investing and personalized indexes. Over the past year and a half, the company carried out a pilot program with Just Invest involving some advisers.