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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.
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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
