John Bogle, founder of Vanguard, said Thursday that fiduciary duty comes down to "simple mathematics" and that even if Securities and Exchange Commission Chairwoman Mary Schapiro decides to leave her post at year-end and a fiduciary duty rule loses momentum, "We'll keep at it."
Speaking at the National Association of Personal Financial Advisors East conference in Baltimore, Bogle said that while Schapiro "loves the idea" of a fiduciary duty rule for brokers, she has been "so frustrated" with internal opposition to such a rule at the agency as well as in Congress.
Fiduciary duty, Bogle said, "comes down to a simple mathematical calculation: How the rewards of investing are divided between the providers of financial services and their clients who put up their capital. Why? Because for investors as a group, gross returns in the financial markets, minus the costs of financial service providers, equals the net returns that are actually delivered to investors."
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