As Reform Bill Nears Release, a Renewed Call for the Fiduciary Standard

Nobel laureates, economists, industry luminaries sign statement from Committee for Fiduciary Standard

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UPDATE: Senator Chris Dodd has released the draft of his financial services reform bill, which does not include a fiduciary obligation for all advice givers. To read the story, and download the bill itself, please click here.


A dozen industry leaders from academia, business, and the media--including two Nobel prize winners, John Bogle, Don Phillips, Roger Ibbotson, and Richard Thaler--have signed the Fiduciary Statement promulgated by the Committee for the Fiduciary Standard which calls for the fiduciary standard established by the Investment Advisers Act of 1940 to be applied to "all who provide investment or financial advice."

The call comes ahead of the expected introduction on Monday afternoon, March 15, of the omnibus financial services reform legislation from Senate Banking Committee Chairman Christopher Dodd (D-Connecticut). That legislation is now not expected to include adoption of a fiduciary standard for both RIAs and brokers.

In addition to gathering the support of these new signatories of the Fiduciary Statement (see below), the Committee called on the heads of the largest brokerage firms--including Bank of America, JPMorgan Chase, Morgan Stanley, and Goldman Sachs--to also sign the statement.

In the news release announcing his signing, John Bogle said that "Restoring the faith of investors must begin with a demand that investment and financial advisors stand up for the rights of their clients," and further argued that "Congressional action was needed to affirm the basic principle that when rendering investment advice, 'No man can serve two masters.'"

The new signatories to the Fiduciary Statement are:

George Akerlof, PhD

Nobel Laureate in Economics 2001

Dan Ariely, PhD

Professor, Psychology and Behavioral

Economics, Duke University

Cliff Asness

Managing & Founding Principal,

AQR Capital

John C. Bogle

Founder, The Vanguard Group

Roger Ibbotson, PhD

Chairman and CIO,

Zebra Capital Management, LLC

Daniel Kahneman, PhD

Nobel Laureate in Economics 2002

John D. Markese, PhD

President, American Association of

Individual Investors

Don Phillips

Managing Director, Morningstar

Jane Bryant Quinn

Personal Finance Columnist and Author

V. Daniel Radford

Former Federal Reserve Governor,

Vice President, Ullico Investment Company

Terry Savage

Personal Finance Columnist and Author

Richard Thaler, PhD

Professor, Behavioral Science and Economics ,

University of Chicago

The Committee for the Fiduciary Standard is a volunteer group formed last year to discuss and promote the fiduciary standard; Wealth Manager Editor-in-Chief Kate McBride is a member of the Committee, along with such individuals as Harold Evensky, Sheryl Garrett, Ron Roge, Blaine Aikin, and Knut Rostad, who chairs the group.

For more on the Committee for the Fiduciary Statement, click here.

To read the Fiduciary Statement, click here.

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