Vanguard says President Tim Buckley will leave the $9 trillion asset manager this year

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Vanguard CEO Tim Buckley will step down at the end of this year after six years, following a period of rapid growth that included the $9 trillion asset manager coming under fire for its stance on climate change.

The world's second-largest money manager said it plans to consider internal and external candidates to replace Buckley, a 33-year veteran who has led Vanguard's efforts to expand overseas and into financial advice.

The Pennsylvania-based group, known for its low-cost index funds and retirement plan offerings, said it has elevated chief investment officer Greg Davis to an expanded role as president, effective immediately.

Davis will continue to lead investment management and will assume responsibility for Vanguard's retirement business and the arm that serves professional financial advisors.

Under Buckley, Vanguard expanded to more than 50 million clients and assets under management rose 80 percent. The group has been slowly moving away from BlackRock's lead in US exchange-traded funds, and is currently one of the hottest parts of the asset management industry.

However, she has been criticized by progressives for withdrawing from one of the most prominent climate coalitions, and has faced allegations of greenwashing from Australian regulators. In the US, the company and fellow index fund providers BlackRock and State Street have come under scrutiny left and right because of the influence they wield by owning large stakes in most US public companies.

Buckley initially joined Vanguard as a research assistant to Jack Bogle, the group's founder, who pioneered passive investing and the company's unusual mutual structure. This has enabled the company to revolutionize the asset management industry by reinvesting profits to reduce fees charged to investors and pressuring competitors to do the same.

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Buckley eventually served as IT director and then president before becoming the company's fourth CEO.

Mark Loughridge, Vanguard's lead independent director, praised Buckley for leading the group through “a period of unprecedented innovation, growth and transformation, building high value-added services and businesses and expanding our advisory offerings”.

Davis, who was born in Germany to a US military family, joined Vanguard's bond indexing team 24 years ago and has been CIO since 2017.

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