The current Managing Director, Mr Frank Kolimago, who has led the Australian business since 2018, will be taking up a new role for the Vanguard group as Global Head of Talent Management based at the group’s headquarters in Malvern outside Philadelphia in the US. The transition of roles will take place over the coming weeks.

Mr Shrimski joined Vanguard’s Australian business in 2011 as the company’s Chief Financial Officer.

He moved to the US in January 2017 to become the divisional CFO of the U.S. Retail Investor Group, which comprises over $US2 Trillion in AUM and more than 7 million Retail investors. Most recently he has been CFO for Vanguard’s International business and Aa member of the International Leadership Team.

Mr Shrimski has a wealth of experience both in Australia and the US in the financial services industry. Prior to Vanguard he spent 11 years at GE across Australia, U.S and The Netherlands. Prior to joining Vanguard, he was a Finance Director within GE Capital Australia’s consumer finance division.

Vanguard has been serving Australian investors for the past 25 years by providing investment options either through advisers and institutions that share our low cost, diversified philosophy or direct to investors through our range of managed funds and market-leading ETFs.

Vanguard recently announced plans to enter the superannuation market and work is well advanced for the launch of the new super fund in 2022.

“It is an exciting time to be re-joining the Australian business,” Mr Shrimski said.

“Since I left Australia in 2017 the business has evolved significantly and with a stronger focus on working directly with investors and the advisers that serve them. The launch of Vanguard super next year will be an exciting step forward on that journey to help Australian investors achieve their financial goals.

“Vanguard has a long history in Australia and the support we have received from the financial advisory industry is testament to the value we aim to provide to investors through our low cost, diversified and long-term investment philosophy. It is humbling to see the growth in our ETF business in the four years since I left Australia and the trust that investors are placing in Vanguard. I couldn’t be more excited for what lies ahead,” Mr Shrimski said.

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Based in Sydney, Mr Jacques’ appointment follows a comprehensive recruitment process and joins Vanguard Australia as it continues its growth and expansion of low cost, high quality products and services for Australian investors.

Vanguard Australia’s Managing Director Frank Kolimago said: “Curt’s appointment further adds to the depth of skills and knowledge of the team at Vanguard Australia as we continue the steady journey of building presence and earning greater trust with more direct investors and financial advisers”.

Mr Jacques comes to Vanguard most recently from Macquarie Group and brings nearly 20 years of risk expertise working alongside asset managers and global banks in enhancing their risk programs and frameworks.

He has a B.S. in Business Administration from Babson College and holds Chartered Professional Accountant, Certified Information Systems Auditor and Project Management Professional certifications.

Mr Jacques starts on 18 November 2020 and Vanguard looks forward to welcoming him.

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Frank Kolimago

Vanguard Australia was the largest seller of Exchange Traded Funds (ETFs) in the first half of 2020 following the release of sales for the June 2020 quarter. The $4.3 billion in new flows during the June quarter was the largest overall quarterly increase in sales on record.

For the 2020 year to date Vanguard Australia has recorded inflows of $2.66 billion, representing 32 per cent of the total industry inflows of $8.2 billion. Sales of the Vanguard Australian Shares Index ETF (ASX:VAS) attracted an unprecedented level of investor support and accounted for more than half of Vanguard’s total ETF sales in the June quarter.

Vanguard Australia’s Managing Director Frank Kolimago said: “It is clear that Vanguard’s commitment to providing low cost access to a broad range of Exchange Traded Funds has struck an enduring chord with investors looking to grow their wealth in pursuit of their broader financial goals.

“Supporting investors to follow a long term strategy to growing their wealth was the key reason for the recent launch of the Personal Investor offer which provides investors with a package of tools to manage their investment portfolio. It also provides access to brokerage free Australian listed Vanguard ETFs, which have proven to be so extremely popular with investors.”

“Vanguard recently included access to Personal Investor for Self Managed Superannuation Funds and further enhancements are planned for the coming months to ensure we provide low-cost access to  Vanguard’s range of index and actively managed funds to the widest range of investors. Through Personal Investor, we are taking the offer to investors to grow their wealth to a new level,” he said. 

As at 30 June 2020, Vanguard Australia continues to be the largest ETF issuer with AUD$20.54 billion under management and 29 ETF products on offer.

Industry Commentary

The Australian ETF industry assets under management (AUM) sits at more than $65.5 billion.

Across the quarter, Australian equities proved to be the most popular asset class with investors, representing 45 per cent or AUD $2 billion of new cash flows to the ETF industry. This trend demonstrates Australians’ confidence in the local market, according to Minh Tieu, Head of Capital Markets for Asia-Pacific.

“This strong tilt to local shares is particularly marked given that our local market accounts for such a small percentage of the global market and may show that investors believe we’re doing better than national economies during the pandemic,” said Mr Tieu. 

“While investors are showing increased confidence in the local market, the latest bout of higher share market volatility is a timely reminder that the global diversification of their share allocations can reduce volatility as well as reduce concentration risks and expand opportunities for returns,” he said.

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Mr Gopal’s appointment follows the return of Lori Mighton to Pennsylvania, United States following the successful launch of the Vanguard Australia’s Personal Investor offer. Ms Mighton will be taking on a newly created role within the Vanguard Group’s Enterprise Advice business.

Vanguard Australia’s Managing Director Frank Kolimago said: “Balaji is well known to many through his work leading Vanguard Australia’s Product Strategy team in long-term product planning, research, development and implementation. His deep experience in product implementation and execution strategy is the perfect mix of skills for our next Head of Personal Investor as we continue to challenge the status quo and provide Australian investors with more high value products and experiences.”

Mr Kolimago said the moves continue to signal Vanguard’s commitment to the ongoing development of talent by rotating executives through different parts of the global organisation.

“We would like to recognise the pivotal role Lori played in the building of Vanguard Personal Investor. Under her leadership, the team developed and launched an ambitious and future focussed digital offer for Australian investors. Lori has been a valued member of Vanguard Australia’s Executive Team during her three years in Australia and we wish her the very best as she returns to the United States and embarks on her new challenge in the group responsible for Vanguard’s cloud-based advice product platform,” said Mr Kolimago.

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In an increasingly complex investing environment, Vanguard Personal Investor, combined with the new website, is a simple and straightforward investment offer that delivers a great client experience and provides direct access to a wide range of Vanguard’s low-cost managed funds, Australian-listed exchange traded funds (ETFs), Australian shares and an integrated cash account.

As part of Vanguard’s ongoing commitment to lower the cost of investing, Australian-listed Vanguard ETFs will be offered brokerage free.

Launching the offer, Frank Kolimago, Vanguard Australia’s Managing Director, said Vanguard Personal Investor combined Vanguard’s global scale with local expertise.

“The launch of our Personal Investor offer and development of a new and intuitive Australian website represents an important step towards providing a range of investment products and services direct to Australian investors.”

“For more than 20 years Vanguard has helped Australians work toward their financial goals, but we recognise that we could make investing with us a more seamless experience. Both the new website and Vanguard Personal Investor offer are important steps forward in helping investors attain better outcomes in meeting their financial goals.”

“We are launching this new offer to investors during a time when market volatility is high, as the uncertainty of the impacts of the coronavirus continue to roil markets. But this challenging period will eventually pass. And Personal Investor will help long term investors to be well positioned to benefit when it does.”

In addition to simplifying the investing experience, Vanguard Personal Investor will also offer access to Australian shares at $19.95 or 0.15% per trade (whichever is greater) and access to a Vanguard Cash Account.

Vanguard Personal Investor is being introduced in a phased rollout which will see additional functionality and features added over time to further enhance the investing experience. This includes, for example, access for Self Managed Super Fund (SMSF) accounts, the ability for financial advisers and their clients to access the offer and website, both features that will offer a holistic investment journey for all investors, Mr Kolimago noted.

“The Personal Investor offer caters for investors looking to access Vanguard’s broad range of products directly. We will continue to work closely with financial advisers to support their clients on their investment journeys.”

Both current and new Vanguard investors will be able to open a Vanguard Personal Investor Account. They will gain access to a range of Vanguard’s Australian managed funds at wholesale management expense ratios, Vanguard’s Australian listed ETFs brokerage free, Australian shares and an integrated Vanguard Cash Account. All these features will be available at a competitive annual fee of 0.2% of the total account balance, capped at $600.

“Some people procrastinate about starting on the investing journey because they are daunted by the often-complicated process of investing. The delivery of our first-class digital experience is a step towards demystifying the investment process,” said Mr Kolimago.

“Intuitive and uncomplicated, it takes only a matter of minutes to register to invest in a range of broadly diversified and competitively priced Vanguard managed funds and Australian listed ETFs. It is simply a matter of signing up to a Vanguard Personal Investor Account.”

“Vanguard will continue to look at how we can offer more products and services that meet the needs of Australian investors. For instance, we have plans to add international shares to the brokerage service and in the longer term, the development of a superannuation offer to help more Australians achieve their goals in retirement.”

Individual investors who meet the eligibility criteria can open a Vanguard Personal Investor Account and take advantage of the offer from today.

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Maxim Tambling joined as Head of Human Resources on Monday, 18 November, Louise Eyres will commence as Head of Marketing in December, and Michael Lovett will return to Melbourne from Vanguard’s US head office to lead Vanguard Australia’s planned superannuation offer in January 2020.

Reporting directly to Vanguard Australia Managing Director, Frank Kolimago, the three appointments signal Vanguard’s intent to further strengthen its leadership in the financial services sector.

“As the Australian business continues to develop our organisational capabilities in support of investors, financial advisers and institutions, we’re excited to welcome Louise, Maxim and Michael to bring a valuable mix of expertise and experience to Vanguard Australia,” Mr Kolimago said.

Mr Tambling brings to Vanguard 18 years of experience as a leader and professional in human resources, having worked for a number of domestic and global organisations in Australia and the United Kingdom.

Mr Tambling holds a Bachelor of Arts in Psychology from the University of Tasmania, and a Masters of Business Administration from Deakin University.

Ms Eyres, in the newly created role of Head of Marketing, will lead a Melbourne-based team as Vanguard splits its Product and Marketing function into two more specialised functions. Evan Reedman, who has led Product and Marketing for four years, will continue to lead Vanguard Australia’s growing Product function.

Mr Lovett will relocate back to Melbourne from his role on Vanguard’s Financial Adviser Services executive team in the US, where he has been leading the Registered Investment Adviser channel since the start of 2017, supporting key relationships with financial advisers in that market. Prior to taking on this role in the US, he served as Vanguard Australia’s Head of Distribution from September 2013 to December 2016.

“Michael’s significant experience puts him in a strong position to lead our superannuation undertaking as we develop this new offer with both individual investors and financial advisers in mind,” Mr Kolimago said.

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Steve Utkus

Vanguard has released its second edition of How Australia Saves – a report which takes a deep dive into how Australians are managing their superannuation savings and the outcomes they are achieving.

The report takes a look at trends in contribution behaviour, choices and outcomes at an individual member level of over 2.3 million members over the three financial years to 30 June 2018, representing close to 10% of all APRA-regulated fund assets.

The report is the product of a collaboration between Vanguard and three of Australia’s leading profit-for-member superannuation funds – First State Super, Sunsuper and VicSuper. Vanguard launched the first edition of How Australia Saves with the support of founding partner Sunsuper back in 2017.

The research is based on methodology developed by Vanguard’s Centre for Investor Research in the US who have been producing How America Saves since 2000, with annual updates providing a unique insight into trends in defined contribution (DC) plan participant behaviour and retirement plan design.

Steve Utkus, Head of Vanguard’s Centre for Investor Research said “We are delighted to issue this second edition of insights on the Australian superannuation system.  Our view is that comprehensive data analysis can help inform better retirement policy and industry practice.”  The new publication joins similar Vanguard efforts in the U.K. and U.S.

“One of the key research insights is that while retirement systems differ across countries, certain behavioural characteristics are globally pervasive, such as inertia in decision-making.  This puts the onus firmly on policymakers and industry to ensure both defaults and policy settings are well aligned to the best interests of members”, said Mr Utkus.

Superannuation in 2018 – still a maturing system

Paul Murphy, co-author of the report, Senior Manager, Government Relations & Industry Policy at Vanguard Australia, presented key findings of the 2019 report at the launch event in Sydney commenting, “Despite its size and rapid growth rate, the Australian superannuation system is yet to reach full maturity.

“Superannuation is at a key tipping point in its evolution with its transition into a broader lifetime pension system, fuelled by the movement into retirement of the initial cohort of the baby boomer generation.

“What this report provides are key metrics which can provide a foundation for long term evidence-based assessments as markets and regulation evolves.”

Only 12% of members made additional contributions

The report showed that member contribution rates are firmly anchored to the Superannuation Guarantee demonstrating the importance of good policy design.

Twelve per cent of working members made salary sacrifice or non-concessional contributions or both during the period studied and the level of these voluntary contributions was consistent during the three-year period.

Self-directed members made a higher proportion of voluntary contributions, with 25% of members in this category contributing over and above the Superannuation Guarantee.

Female members made more non-concessional contributions than males across all investor types observed.

The data showed a strong correlation between age and voluntary contribution rates.  Members with total contribution rates between 10% and 15% of salary in 2018 had a median age of 49, and members with contribution rates above 15% had a median age of 59.

Few members hold extreme asset allocations, default options most popular

The research confirmed a vast majority, 87%, of accounts were solely invested in default (MySuper) investment options.

Only 1% of members had no allocation to growth investments such as shares and property, while at the other extreme, the percentage of members investing exclusively in growth investments was also only 1%.

Over the past three years the allocation to growth investments across the full member population remained consistent at 69%. Surprisingly, the report showed that self-directed investors were on average choosing a more conservative asset allocation with 59% allocated to growth assets.

Median investment returns were strong

The median estimated total return for fund members was 10.2% for the one-year period ended 30 June 2018. Over the three years the report covers, median estimated member total annual returns were 8%.

There was wide variation in returns among members, however members holding the lifecycle and target risk options had very little dispersion in estimated returns while unsurprisingly self-directed members saw the most variation in risk and return outcomes.

Member switching was muted

Only 3% of total members made one or more portfolio switches during the 2018 financial year, which was consistent with the previous two years. Both target risk and self-directed members displayed higher rates of switching than lifecycle members at 4% and 16% respectively.

Low incidence of fund rollouts and withdrawals

Only 4% of members rolled their funds into another APRA-regulated super fund during the period, and 1% made a partial rollout. Less than 0.5% of members rolled out their super funds into a self-managed super fund.

In the group studied 2% of members in 2018 were pensioners receiving regular income stream payments, with a median withdrawal of $21,321 or 8% of account balances (including lump sum withdrawals as well as income stream payments).

Another 1% of members were in the Transition to Retirement (TTR) eligibility age bracket, with a median age of 62.  Among this group 16% availed themselves of the TTR facility in 2018, with a median drawdown of 9% of account balances.

Thanking our partners

Wrapping up the session, Vanguard managing director, Frank Kolimago said “We would not have been able to compile this report without the gracious participation of our research partners, founding partner Sunsuper, along with First State Super and Vic Super joining us in this edition, who all share our common goal of improving member outcomes.

“Our aim is to deliver this research on a biennial basis, providing high quality and impartial data that becomes a critical resource over time as the superannuation industry continues to evolve.”

Deanne Stewart, CEO of First State Super said: “Our collaboration with Vanguard and our partner funds has produced research that allows us to understand how Australians are managing their super and their retirement outcomes at scale.  This insight into member behaviour will support our efforts to shape the future of superannuation and inform the development of products and services that will help members to achieve the best retirement outcomes.”

Scott Hartley, CEO of Sunsuper commented “A research project of this magnitude is no small feat, but I truly believe that the work we’re doing through How Australia Saves is invaluable for us as an industry in terms of delivering better outcomes for and engagement with our members.”

Michael Dundon, CEO of VicSuper said “We have no doubt that How Australia Saves will be increasingly influential in identifying opportunities for participating super funds in looking for ways to better serve their members. We’re pleased to be able to be involved in this valuable piece of research that will help us create even better experiences and outcomes for our members.”

Download the full report: How Australia Saves 2019.

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The current Managing Director, Mr. Colin Kelton, who has led the Australian business since 2015, will be taking up a new role for the Vanguard Group as Global Head of Marketing based at the group’s headquarters in Malvern outside Philadelphia in the United States. The transition of roles is expected to be complete by August 2018.

Mr. Kolimago is a principal and head of Vanguard Personal Advisor Services, which provides Vanguard clients with a comprehensive ongoing advice service offering.

He joined Vanguard in 1996 and has served in a variety of roles. In 2000, he moved to Japan to assist in establishing and managing Vanguard’s Tokyo office. In 2003, Mr. Kolimago worked in the Institutional Division as a principal in Scottsdale, Arizona.

He returned to the Malvern, Pennsylvania campus in 2008 to lead teams that serve and support institutional retirement plan clients through a variety of postions.

In May 2015 he joined Vanguard Personal Advisor Services to lead the team just prior to the official launch of the service. Personal Advisor Services is a hybrid advisory service, combining a robust digital experience and sophisticated proprietary technology, with the counsel and oversight of a human advisor.

“The Australian business was the first established by Vanguard outside the US more than 20 years ago. Given the growth in the business over that time it is an exciting opportunity to be joining the business and building on the work that Colin and his predecessors have done serving Australian clients across the institutional, adviser and individual investor markets,” Mr. Kolimago said.

Mr. Kolimago earned a B.S. in finance from Saint Joseph’s University and an M.B.A from Villanova University, and has completed the Advanced Management Program at the Wharton School of the University of Pennsylvania. Before joining Vanguard, Mr. Kolimago was a vice president in the corporate banking division of PNC Bank, N.A.

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