Vanguard Group, the nation's second-largest mutual-fund company, has decided to warm up to full-service brokerages, an old rival of the company, in an attempt to reverse its falling behind in the race to grab investors for exchange-traded funds (ETFs), the Associated Press reports.

Known for its do-it-yourself, direct retail approach, Vanguard has now included ETFs in the portfolios recommended by full-service brokers, which in turn, target clients that Vanguard hasn't catered to before: Those who want someone else to manage their money.

"It will be very weird to hear a broker start talking about Vanguard," said Dan Wiener, editor of The Independent Adviser for Vanguard Investors in Potomac, Md. "Vanguard is a no-load outfit."

Subscribe Now

Access to premium content including in-depth coverage of mutual funds, hedge funds, 401(K)s, 529 plans, and more.

3-Week Free Trial

Insight and analysis into the management, marketing, operations and technology of the asset management industry.