In his inauguration speech today, President Obama told us that, "Those of us who manage the public's dollars will be held to account -- to spend wisely, reform bad habits, and do our business in the light of day -- because only then can we restore the vital trust between a people and their government."
What he was saying is that government officials have a fiduciary duty to their constituents. (If only he could have actually used the "f" word!) The three items he calls for roughly could be equated to controlling fees, instituting a defined process, and giving full transparency, three of the primary tenets of fiduciary responsibility. It would be nice if every politician listening took this to heart and if the new leadership applied the pressure and accountability necessary to make it a reality.
We've already seen signs in the past week that we shouldn't expect a continuation of the status quo in terms of retirement regulation. 408(b)(2) is being pulled, presumably for even stricter disclosure requirements from new leadership, and the investment advice rules of the PPA are going forward, with George Miller already promising to see to it that they don't. I'm hopeful that these moves signal a stronger imperative for disclosure.
The best part of an inauguration or any change in leadership is the potential that is there for change in the right direction, but potential is worth little if it becomes unfulfilled. So let's enjoy the honeymoon period but keep our own "watchful eye" on Obama and hope that a culture of fiduciary responsibility really does take hold in government and continues to grow in the investment industry.
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