The Vanguard Cyborg Takeover

The No. 1 mutual fund company wants to own cheap advice.

Illustration: 731; Photographs: Corbis (1), Getty (3), Shutterstock (6)

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By Margaret Collins and Charles Stein

March 24, 2016 at 4:00 PM UTC

This article is for subscribers only.

This article is part of the March 28, 2016 issue of businessweek.

Vanguard Group has grown to $3.4 trillion in assets by dominating sales of low-cost index mutual funds, the ultimate do-it-yourself investments. Now it’s seized an early lead in a new business: inexpensive financial advice.

Automated, Web-based “robo advisers” such as the startups Betterment and Wealthfront have attracted a lot of attention in the investment industry. But Vanguard’s new Personal Advisor Services platform, which combines tech with human advisers reached by phone or video chat, is drawing more money. From its official launch last May through December, it brought in $12 billion in assets. That’s four times the amount held by either Betterment or Wealthfront and more than twice as much as the automated-advice platform Charles Schwab introduced in early 2015.