Due to the growing complexities of the custody business and the few assets it has supervised, Vanguard will cease acting as custodian for the intermediary market. Instead, the firm said it will improve investment support, although it did not specify how.

"Quite frankly, we have not always made it easy for [financial advisers] to do business with us," conceded Martha Papariello, principal, Vanguard Institutional Investments Group.

To accommodate advisers who have relied on Vanguard as custodian of their assets, the firm has made arrangements with TD Waterhouse Institutional Services.

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