Vanguard’s Rampulla isn’t discouraged. He said the firm’s unusual structure -- it is owned by the investors in its funds - - will resonate with the public.
Because the company refused to pay commissions, Vanguard products originally weren’t offered by most advisors or platforms that distribute funds, Rampulla said. That’s changing as commissions vanish.
“We are no longer going to be fishing in just a small part of the pond,” he said.
Similar deals to the Cofunds distribution agreement may be announced before year-end, Rampulla said. As the rule change nears, the company is running an educational program for advisors that lets them know how their counterparts in the U.S. and Australia have coped with the transition to a world without commissions.
Vanguard wasn’t an overnight success in the U.S., said Ben Johnson, Morningstar’s director of passive research in Europe and Asia.
“It was a process that was decades in the making,” Johnson, Morningstar’s director of passive research in Europe and Asia, said in a telephone interview.
Vanguard’s limited name recognition and the lack of a prominent “evangelist” like Bogle in the U.K. advocating for index funds makes it likely the firm’s progress will be gradual, Johnson said.
“It is not a guarantee they will succeed, but over the long term, the odds are in their favor,” he said.