Bogle’s third great insight was that the business should be a fiduciary to its clients. This has vexed politicians, regulators and Wall Street denizens alike. It’s the simple idea that customers’ interest always comes first. The Obama administration’s Fiduciary Rule, as it is known, has run into stiff opposition, especially among the commission-driven brokerage side of money management. But McNabb said that to Bogle, it was a simple truism: “When you serve only one master — your client — your priorities become very clear.” Rick Ferri, CEO of Ferri Investment Solutions, has proposed renaming this “the Bogle Rule.”
As a self-anointed Boglehead, I think I can say he would probably have liked that. It would be a fitting honorific that recognizes how much he did for average investors and how much the industry has changed because of his insights and influence.
This column was provided by Bloomberg News.