John Rogers: The Dawn of Fiduciary Capitalism

John Rogers financial Engineering

John Rogers Financial Sector

John Rogers Probe

The costs of a failure of trust

Social impact

Fear and mistrust drive defensive investing

Long-term consequences of short-termism

Savings gaps mean:

  • longer working lives
  • lower quality of life
  • intergenerational stress

What is a fiduciary?

“A fiduciary is someone who has undertaken to act for and on behalf of another in a particular matter in circumstances which give rise to a relationship of trust and confidence.” – Lord Millett, Bristol and West Building Society v Mothew

Changing balance of power

Top 1,000 global institutional investors account for $25 trillion

Fiduciary agenda

  • Liability-driven
  • Minimize cost
  • Long term
  • Universal ownership

Liability-driven

“The majority of investors (87%) believe that meeting their own unique investment objectives is more important than outperforming relative to their chosen benchmarks.”

A survey of institutional investors who collectively have 2.5 million employees and more than $500 billion in assets under management. Commissioned by Northern Trust, Greenwich Associates.

Universal Ownership

  • Size
  • The whole economy, forever
  • Externalities (bad & good)
  • If you can’t sell – engage as owner

Why fiduciary capitalism may fail to launch

  • Governance/compensation/agency issues
  • Transparency failures
  • Dispersion & laziness

Why does this matter?

  • Better owners
  • Lower volatility
  • Externalities – sustainability
  • More efficient financial system
  • Stakeholders – not shareowners

John Rogers On The Future Of Finance: A New Era Of Fiduciary Capitalism Via CFA Institute

John Rogers: The Dawn of Fiduciary Capitalism