By Dr Miles Livingston
The legendary John Bogle, founder and former chief executive of The Vanguard Group, recently met with the US Securities and Exchange Commission to urge it to propose a rule that would require anyone providing retail investment advice to act as a fiduciary.
Mr Bogle and two other representatives of The Institute for the Fiduciary Standard argued that investment advisers at large mutual fund companies and other financial institutions often operate with conflicts of interest and do what is best for themselves rather than their shareholders. The Investment Company Act of 1940 requires that mutual funds be organised and managed in the interest of shareholders, rather than their managers or directors, but Mr Bogle pointed out that in practice, the spirit of the law is violated. Read more