A fiduciary is legally obligated to act in the best interest of the person or entity they are representing. In other words, they have a fiduciary duty or obligation to their client. In the world of financial advisors, only independent Registered Investment Advisors have fiduciary responsibility.

Report Suggests Significant Changes in Financial Advisor Compensation

PriceWaterhouseCoopers ("PWC") released a report suggesting that the landscape for financial advisors may be shifting towards more objective, performance-based compensation. The report indicates that the financial advisor of the near-future may be compensated based on the long-term performance of client assets: In this increasingly competitive environment, compensation of advisers will change to reward long-term investing , with less money earned from short-term “ churning ” of...

Employers Cautious About Annuities in 401k Plans

Employers who offer 401k plans seem intrigued by the notion of providing an annuity option to employees who participate in the plans. Recent stock market volatility makes the prospect of stable, guaranteed income very attractive in theory: Given the stock market’s volatility, Silgan is one of a number of 401(k) plan sponsors seriously discussing adding an annuity option to their 401(k) plans. With most employees’ 401(k) accounts decimated, the idea of providing guaranteed post-...

Obama Administration Proposes Fiduciary Standards for Brokers

The Obama administration's proposed financial services regulatory overhaul may have a profound impact on the way that investment advice is disseminated in the United States.

The administration's proposal would impose a fiduciary standard on financial advisors who offer investment advice.

As reported earlier, stockbrokers are currently held to standards of "...

Panel of Experts Discuss Annuities in 401k Plans

The use of annuities in 401k plans is an issue receiving quite a bit of attention lately. Experts, policy makers and industry analysts understand the clear need for guaranteed income options for people who have their savings built-up in 401k plans and individual retirement accounts (IRAs): “I think one of the top goals of the new (Obama) administration is to find a way to annuitize or at least guarantee or secure some sort of income in retirement,” said Mr. Davies. “That's really the final...
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John Bogle Recommends Federal Standard of Fiduciary Duty for Money Managers

Speaking at an industry conference this past week, Vanguard founder John Bogle suggested that all money managers should be subject to a federal standard of fiduciary duty. Bogle believes that some money managers have been taking advantage of their positions at the expense of the shareholders whose interests they presumably represent. Bogle also suggested that the mutual fund industry is leaning too heavily on past returns and, as a result, that Monte Carlo simulations should be abandoned...
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