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Vanguard's John Bogle Urges Americans to 'Fight On' for Retirement Investing Fairness

Vanguard's John Bogle Urges Americans to 'Fight On' for Retirement Investing Fairness

John “Jack” Bogle, the founder of investing giant Vanguard Group (AP Images/Mark Lennihan)

By    |   Friday, 26 August 2016 08:46 AM

 

John “Jack” Bogle, the founder of investing giant Vanguard Group and a long-time investment-transparency advocate, applauded the Obama administration’s new rules for U.S. brokers managing retirement accounts.

Bogle, reflecting on all these years of making the case for low-cost investing, was equally thrilled to see the fiduciary standard finally become the law of the land and cheered the rule at the launch of The Institute for the Fiduciary Standard’s “Campaign for Investors,” which helps investors find financial advisors who best meet their needs and serve their interests first.


"I've been seeking such a rule, arguably, since I wrote my senior thesis at Princeton University 65 years ago," he said, MarketWatch reported.
 

"So fight on, it's worth it, stay the course and press on regardless," said Bogle, who in 1974 founded Vanguard, the largest mutual fund organization in the world. Vanguard comprises approximately 170 mutual funds with current assets totaling more than $2 trillion.

The Labor Department released what’s known as the fiduciary duty rule in April, with administration officials saying it will help protect millions of savers from conflicted investment advice that costs the public $17 billion annually.
 

The White House has said the tougher standard will eliminate hidden incentives that cause brokers to push investment products with high fees and commissions. The industry argues that the rule will hurt less-affluent investors, because firms facing steeper compliance costs will drop smaller accounts.

Bogle also recently offered investing advice in a company podcast. He advised against trying to build wealth by investing in commodities, gold, real-estate partnerships or triple-leverage funds, calling them tricks or shortcuts, the Reading Eagle reported.

"Don't do it," warned Bogle, named in 2004 by Time magazine as one of the world’s 100 most powerful and influential people.

"More money has been lost reaching for income than has been lost at the point of a gun," Bogle said. "You have to stay within the confines of the market."

Bogle also said investors should avoid treating the stock market as a place to express gambling instincts.

"It's a wonderful way to gamble, but a terrible way to accumulate a retirement fund," said Bogle, designated in 1999 by Fortune as one of the investment industry’s four giants of the 20th Century. "Put money in two sections: a serious money account and a funny-money account. Limit funny money to five percent. You may get lucky, but I wouldn't count on it."

As for the fiduciary rule, it has sparked its share of backlash. Wall Street and business lobbying groups have teamed up to fight the rules for U.S. brokers managing retirement accounts, saying the regulations include a “ deliberately unworkable” fiduciary standard, Bloomberg reported.


The U.S. Chamber of Commerce joined groups including the Securities Industry and Financial Markets Association and the Insured Retirement Institute in filing the lawsuit in Dallas federal court against the Department of Labor and Secretary Thomas Perez. The industry organizations allege that the department, which created the rules, encroached on the U.S. Securities and Exchange Commission’s territory and overstepped boundaries for regulating broker-dealers that were established by Congress.


(Newsmax wire services contributed to this report).
 

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John "Jack" Bogle, the founder of investing giant Vanguard Group and a long-time investment-transparency advocate, applauded the Obama administration's new rules for U.S. brokers managing retirement accounts.
vanguard, john bogle, retirement, investing
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2016-46-26
Friday, 26 August 2016 08:46 AM
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