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The Institute for the Fiduciary Standard

A resource site for investors, brokers, academics and the media.


Building a fiduciary culture of honesty, integrity, and expertise.

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  • Jack Bogle

Clear Advice from Jack Bogle

By Knut Rostad on July 27, 2012

Vanguard Group founder Jack Bogle has always been a proponent of reliable, long-term investing over short-term speculation. Over the years, Bogle has expressed numerous opinions on a multitude of issues about the changes in the financial industry that need to take place to give investors a fair shake. This week, in a wide-ranging interview with Fortune, he declared that a federal fiduciary duty is “the single most important action we need to be taking now.” This comes after two years of industry debate  following the passage of the Dodd-Frank Act.
Bogle’s full comment:

 

Fortune: What is the single most important action we need to be taking now?

Bogle: We need to have a federal statute of fiduciary duty, which would require that fiduciaries place the interest of clients ahead of their own. Conflicts of interest like conglomerates would be disallowed. You can’t serve two masters. The statute would outline the rights and responsibilities of corporate governance. It would include providing services at low costs, putting the interest of shareholders (i.e. their customers) ahead of their public shareholders.

 

Although this interview touched on many topics, the issue of a federal fiduciary standard was at the top of Bogle’s list. The Institute, of course, agrees with his comments. Undisclosed conflicts of interest continue to be a huge problem, and investor trust is understandably low. Conversely, advisors who follow a fiduciary standard of care are legally bound to put the interests of their clients first. The Institute is working to make Bogle’s image of a fiduciary statute a reality as this issue continues to gain support.

Dan Moisand

 

Dan Moisand is a nationally recognized fiduciary fee-only financial planner, an Institute Real Fiduciary™ Advisor and Chair-elect of the CFP Board.

The Institute has enshrined the ‘Moisand Rule’ on fiduciary practices. It is basic and is more important today than ever: “You have to avoid conflicts. If I avoid a conflict, I don’t worry about it.”

Watch the video of Moisand speaking here.

Bob Veres

 

Bob Veres is a long term observer of financial planning. His Newsletter, “Inside information” Is a staple of leading planners. In the May edition he writes about fiduciary and the Institute.

"But a much bigger point is that the fiduciary standard—as Knut Rostad of the Institute for the Fiduciary Standard has pointed out—has been determined by the Supreme Court (1963 ruling) to be at the very heart of the Investment Advisers Act of 1940. It is the foundation of what it means to be an RIA registered with the SEC instead of a tipster or a tout."

- Bob Veres, Parting Thoughts ... The SEC's Own Compliance Culture

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