Ramji Takes Over Vanguard Amid Challenges, Tailwinds

First outsider to lead the No. 2 ETF issuer assumes role with customer service in focus.

Salim Ramji assumes Vanguard Group’s chief executive officer post as the No. 2 ETF issuer confronts a mix of challenges and tailwinds: as customer service complaints rise, cash is flowing into the company’s funds.

The first outsider to lead Vanguard, which has $2.68 trillion in 86 exchange-traded funds, will also be tasked with updating the company’s technological infrastructure and deciding whether or not it joins rival firms in offering cryptocurrency exchange-traded funds.  

Ramji, 53, arrives at Malvern, Pa.-based Vanguard from its larger rival, BlackRock Inc., where he helped launch its first spot bitcoin ETF, the Blackrock Bitcoin Trust (IBIT), now the largest fund of its kind with $19 billion in assets. He’s widely seen as an admirer of Vanguard founder Jack Bogle, which may help win over the so-called Bogleheads that follow the $9.3 trillion asset manager with 50 million investors.

Financial planner and columnist Allan Roth said in an email that he had received from Ramji a personalized response to a blind email. “That reminded me of my first contact with John Bogle and that excites me,” he said.

Vanguard Customer Service, Tech Issues

Since former Vanguard CEO Tim Buckley's sudden departure earlier this year—Ramji was named May 16 to fill the CEO role—complaints have been aired about Vanguard’s customer service and technology problems. Observers framed those issues as items bound to surface with a company committed to offering mutual funds and ETFs with low fees. At the same time, they are hoping for improvements.

“I’m very hopeful that Mr. Ramji will bring a fresh perspective and invest in IT which I think is the root cause of their customer service issues,” Roth said.

Vanguard ETF Inflows

Meanwhile the company’s $124.7 billion in ETF inflows leads all firms, well ahead of BlackRock’s $100.3 billion and helping to close the asset gap between them. About $181 billion separate the company’s asset totals, narrower than the $245 billion that New York-based BlackRock led by around this time last year. BlackRock has $2.86 trillion in 442 ETFs, most of them under the iShares brand.