Managing Director & Head of Canada @ Vanguard
“Be curious and think strategically.”
Atul Tiwari serves as the Managing Director at Vanguard Investments Canada Inc. where he is responsible for leading the entire Canadian business. Atul shares his thoughts on the most significant changes in the ETF space, the trends that could shape the industry over the coming years and gives insight into the highlight of his career.
JE: Please tell us about yourself and your experience. How did you become the Managing Director, Head of Canada at Vanguard?
Atul: I started my career in law, which was a great training ground for learning the important aspects of governance, regulation and compliance in the financial services industry. I have held a number of senior positions on the business side since making the transition in 2001, including being the President of Harris Insight Funds, BMO Financial Group’s mutual fund business in the U.S., and the founding President of BMO ETFs. In 2011 I was hired to lead Vanguard into Canada.
JE: What would you say is Vanguard’s overall strategy in terms of ETFs?
Atul: Vanguard operates on a core belief of giving all investors the best chance for investment success. That includes developing a suitable asset allocation strategy using broadly diversified investments that are low cost while maintaining a long-term perspective.
That extends to ETFs, as we now offer 29 different ETFs across a variety of asset classes in Canada. All of these ETFs share the benefit of being high quality at a low cost. This in turn, allows investors to keep more of their returns. This includes the recent introduction of Vanguard’s first actively-managed, factor-based ETFs in Canada.
This low-cost approach aligns to our core belief of treating investors fairly and is reflected in Vanguard’s unique ownership structure. In the United States. The Vanguard Group is owned by Vanguard’s U.S.-domiciled funds and ETFs, which are in turn, owned by their investors. Profits in this case, can then be returned to investors through lower costs.
This mutual structure approach aligns our interests with investors and drive our culture, philosophy and policies worldwide.
JE: What has been the highlight of your career to date?
Atul: Being a part of bringing Vanguard to Canada to serve advisors and investors, and in watching it grow in five years from one to just under 50 employees and being entrusted to manage almost $20 billion in assets.
JE: If you can give advice to those who are just starting in the industry, what will it be?
Atul: The industry is still relatively small, with a long runway ahead of it. The ETF is a great vehicle for delivering investment strategies and will continue to see growth at reasonably rapid rates.
There will be many opportunities for those who take the time to learn about the product and how it can help advisors and investors. Don’t chase fads, think of the long term both with respect to product development and time horizon for investments. Be curious and think strategically. There are going to be product and distribution innovations that we have not even thought of as yet.
JE: What would you say are the most significant changes in the ETF space in the past few years?
Atul: Globally, I think the overall growth of the industry has been the biggest change, when you consider that ETFs now comprise over $3 trillion dollars in global assets, much of it coming over the past few years with Vanguard being a sizable component of that growth.
From a Canadian perspective, this growth has been driven by a growing adoption of lower cost investing and greater competition in the ETF space which has led to more products and choice.
Broader trends have also had a big impact like greater fee transparency efforts by regulators and financial advisors along with increased awareness of investment fees. We have also seen a rise in financial advisors moving to a fee-based compensation model which favours ETFs because of their transparency and low-costs.
JE: What do you think is the “next big thing” – or what should we all keep an eye out for?
Atul: There are a few trends that could shape the industry over the coming years. Digital advice (sometimes referred to as “robo advice”) is one that has generated a lot of headlines lately, with strong asset growth and greater numbers of providers launching every month.
This in fact, may lead to even greater growth in ETFs and low cost mutual funds as many of these advice platforms use lower-cost investments to build client portfolios.
Another clear trend is regulatory changes around the world to increase fee transparency and the suitability of investment products for investors. This leads to enhanced discussions between investors and financial advisors, particularly when it comes to the total cost of investments, thus allowing advisors to define their value.
Both of these trends ladder up to broader changes taking place in the financial investment advice industry, driven by technology and investor behaviour. How that advice is delivered may change but the tried and true investment principles of goal-setting, maintaining a balanced asset allocation approach with strong investment discipline and long-term planning, will stand the test of time.