The fiduciary principle is here to stay — Bogle

Posted by Robin Powell on February 9, 2017

 

Today’s must-read article is by Jack Bogle in the New York Times.

Although it’s still not clear exactly what the intentions of the Trump Administration are, it seems likely that there will be some attempt to scale back the so-called Fiduciary Rule introduced under President Obama — or at least to reduce its impact on Wall Street. Bogle, rightly, is none too impressed.

The article is well worth reading in full, but here are the highlights:

 

Scrapping the rule would be good for Wall Street, bad for investors

“Make no mistake. The demise of the fiduciary rule would be a step backward for our nation, allowing Wall Street to continue to profit by providing conflicted advice at the expense of working Americans saving for retirement.”

 

Higher net returns are a social good

“When the consulting firm A. T. Kearney projected that the fiduciary rule would result in as much as $20 billion in lost revenue for the industry by 2020, it meant that net investment returns for investors would increase by $20 billion. By any definition, that’s a social good.”

 

The fiduciary principle is here to stay

“With or without regulation by the federal government, the principle of ‘clients first’ is here to stay.”

 

Investor education is growing every day

“Investor awareness grows with each passing day. Investors are awakening to the rôle of low costs and broad diversification.. The fiduciary rule may fade away, but the fiduciary principle is eternal.”

 

Related posts:

How to tell a fiduciary from a salesman

The ultimate object of the fund industry

Financial regulation — two steps forward, one step back

Jack Bogle — the man who changed investing for ever

 

Robin Powell

Robin is a journalist and campaigner for positive change in global investing. He runs Regis Media, a niche provider of content marketing for financial advice firms with an evidence-based investment philosophy. He also works as a consultant to other disruptive firms in the investing sector.

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