Practical analysis for investment professionals
25 November 2013

Are We Entering a New Era of Fiduciary Capitalism?

“Imagine what the backlash would be if the auto industry took US$50,000 from every household in the United States without providing anything in exchange.”

According to John Rogers, CFA, president and CEO of CFA Institute, that is one simple way for investment professionals to understand the toll that the global financial crisis has taken on trust in the financial services industry. That $50,000, according to research by the US Federal Reserve Bank of Dallas, was the cost per US household of the 2007–09 financial crisis and only one of the latest additions to five years of negative headlines about finance. This seemingly perpetual drumbeat of cost and scandal has left many scarred investors both fearful and reluctant to trust the industry.

The impact can be measured by the vast numbers of investors who have retreated into cash, Rogers notes, creating in the process a major savings gap. “There will be social consequences down the road,” he warns. “We just don’t see them yet.”

Speaking at the recent Australia Investment Conference in Melbourne, Rogers challenged his audience of investment professionals to reconnect finance to its basic purpose and work to reposition the industry “as a means to an end rather than an end unto itself.”

The CFA Institute CEO made the case that we are entering “a new era of fiduciary capitalism,” which he outlines in more detail in the video below.

Rogers was joined at the podium by Maria Wilton, CFA, managing director of Franklin Templeton Investments Australia, who provided local context and shared her ideas about financial reform. CFA Societies Australia has published a blog post summarizing the key takeaways from both speakers.

Please note that the content of this site should not be construed as investment advice, nor do the opinions expressed necessarily reflect the views of CFA Institute.

Photo credit: ©

About the Author(s)
Peter M.J. Gross

Peter M.J. Gross was an online content specialist for CFA Institute, where he has managed blogs for the CFA Institute Annual Conference, European Investment Conference, and Middle East Investment Conference. Previously, he worked at Hampton Roads Publishing Company and at MFS Investment Management. Mr. Gross' articles have been published by Enterprising Investor, City A.M., Seeking Alpha, and The Hook, and his work has been highlighted by Real Clear Markets. He holds a BA degree from Connecticut College.

1 thought on “Are We Entering a New Era of Fiduciary Capitalism?”

  1. Chris Story says:

    Very interesting, but can peer pressure in the financial industry alone, bring about a fiduciary capitalism? How will the fiduciary relationship be governed? How inclusive would the benefits of this model be?

    When considering the long term, I can’t help but think of a more popular fiduciary capitalism that enfranchises citizens to vote the distribution of economic liberty against a constitutionally unadulterated tax code.

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