Congress should enact legislation mandating that all investment advisers and money managers come under fiduciary standards, John Bogle, founder and former chief executive of The Vanguard Group Inc. of Malvern, Pa., said today.
Mr. Bogle spoke at the IA Compliance Best Practices Summit in Washington. The conference is sponsored by IA Week, published by UCG of Gaithersburg, Md., and the Investment Adviser Association of Washington.
“Investors will not return to the markets in force until they trust them,” Mr. Bogle said at the conference, which was attended by about 200 investment advisory compliance officers, according to a release.
“Surely it should be clear to clients whether they are relying on a trained investment professional, paid solely through fully disclosed fees, or a sales rep who sells the products and services of the company he represents, whether life insurance, annuities, mutual funds or anything else,” said Mr. Bogle.
Mr. Bogle’s remarks followed testimony given earlier this week by Securities Industry and Financial Markets Association Inc. officials calling for replacing both fiduciary standards that require investment advisers to act in their clients’ best interests and broker suitability standards requiring that recommendations be suitable for clients with a “universal standard of care”
SIFMA, which represents the brokerage industry, has offices in New York and Washington.