Advisors Watch Dimensional Amid Possible Sale

Advisors and industry participants have increased scrutiny of Dimensional Fund Advisors after reports that the $1.1 trillion asset manager engaged an investment bank to review strategic options. The privately held company did not comment on speculation about a sale.

Founder and chairman David Booth, who remains a major shareholder and turns 80 this year, addressed the attention at a recent industry conference in Chicago. He described feeling “flattered” by interest in the firm and said he still works with clients and employees. Booth also recalled the firm’s early push into the registered investment advisor market in 1989 and defended Dimensional’s long-term approach to investing: “If you’re investing with a broker, you’re going to be trading a lot,” he said, arguing frequent trading is not beneficial for most investors.

Dimensional traces its roots to 1981 and has expanded into a global firm with more than $1 trillion in assets and roughly 1,600 employees across multiple offices. The company has employed or consulted with several Nobel laureates in economics. Over time it broadened its product lineup to include actively managed exchange-traded funds, ETF share classes for mutual funds, separately managed accounts and unified managed accounts.

The firm responded to mutual fund outflows beginning in 2019 with fee reductions and new ETF introductions. Firmwide net flows turned positive in 2023 and showed modest growth through 2024. Executives have also consolidated some funds to reduce costs and simplify offerings.

Advisors and former employees point to a distribution model built on training and close advisor relationships. In the early years Dimensional required early-adopting planners to attend multi-day seminars and emphasized study groups and consultative outreach over commission-driven sales. Dan Wheeler, a former advisor who joined the firm in 1989 to lead its financial advisor business, is credited with developing those channels.

Some advisors say their primary question is not just who might acquire the firm but whether a buyer would preserve Dimensional’s evidence-based, factor-oriented investment approach and its advisor-facing culture. Kelly Klingaman, a former employee who now runs an advisory firm in Austin, Texas, expressed confidence that company leaders would consider cultural fit carefully if they pursue strategic options and added that Dimensional’s advisor relationships were central to its growth.

Industry observers describe several potential paths for a firm of Dimensional’s size: an initial public offering, a minority private-equity investment, a sale to another asset manager or a buyout of Booth’s stake. Each route would raise questions about fees, product continuity and the firm’s independence. Competition from large index providers and newer factor-focused entrants has increased choices for advisors.

Advisors say they will watch any changes in ownership or governance to see whether the company maintains its advisor-focused distribution model and evidence-based investment approach.