Fiduciary Society

We are inspired by Vanguard founder, John C. Bogle, who speaks of a “fiduciary society in which intermediaries truly represent—first, last, and only—the interests of those they serve.”

We have on this page excerpts that inspire us from his March 13, 2009 speech about “Building a Fiduciary Society.”

John C. Bogle, Founder

The Vanguard Group
Before IA Compliance Summit
Washington, DC – March 13, 2009

“The crisis in our stock market and in our economy has presented us with the opportunity to do a really big thing—to reform our financial system…”

Fiduciary Duty

“Let me take a moment to be clear and explore what we mean by fiduciary duty, a concept that goes back some eight centuries in British common law.  Fiduciary duty is essentially a legal relationship of confidence or trust between two or more parties, most commonly a fiduciary or trustee and a principal or beneficiary, who justifiably reposes confidence, good faith, and reliance in his trustee.  The fiduciary acts at all times for the sole benefit and interests of another, with loyalty to those interests.  A fiduciary must not put personal interests before that duty, and must not be in a situation where his fiduciary duty to clients conflicts with a fiduciary duty to any other entity…”

“Of course this idea generates considerable heat, but I am not sure why. Surely it should be made clear to clients whether they are relying on (1) trained investment professionals, paid solely through fully-disclosed fees to oversee their investments; or (2) sales representatives who sell the products and services of the companies that they represent, whether life insurance, annuities, mutual funds, or anything else. Simply put, the first group is representing its clients; the second group is representing its employers. And each firm’s advertising and promotion should make this distinction clear.”

Read the entire speech on the Bogle Financial Markets Research Center.

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