For our Business Major Scholars …

I could walk around campus with earphones in, never smiling and never greeting any others. Or I could put a smile on my face, greet most who pass me by with a “Good morning” or “Good afternoon” or “How are you doing,” or – simply - “Hello.” I choose to excel.

I could not read the assigned material before each class, hoping that I will skate by just by listening to the professor and cramming before exams. Or I could read the text, answer sample questions, be prepared to participate in class discussions, and do well on all quizzes and exams. I choose to excel.

I could wait until the last possible moment to begin working on assignments.

"Where is the evidence of harm?" Opponents of the fiduciary standard often ask this question. Permit me to find evidence, over the course of several blog posts.

While these may seem like isolated stories - they are not. I have dealt with hundreds of individual investors, and have seen these stories repeated over and over and over again. I have also discussed, with other fiduciary investment and financial advisors - the huge amount of harm which consumers of non-fiduciary advisors suffer today.

The e-mail had arrived Sunday evening, from a student in one of my classes. The Friday before I had to be in Washington, DC for some meetings, so I had our Department Secretary hand out exams in a class. The exam was not proctored; I had trusted my college students to be honest when taking the exam.

The e-mail started: “Dear Professor Rhoades. I’ve been torn all weekend. Finally, I decided to write to you.

I acknowledge that my clients know far less than I do about investments, taxes, retirement planning, and so much more.

I acknowledge that this vast knowledge asymmetry cannot be cured by financial literacy efforts, due to the inherent complexity of the capital markets, the many products which confront investors today, the opaque disclosures found with such products.

I am pleased to share with you this compilation, taken from compositions submitted by my students over the past few years. If you are currently starting college, or if you are already in college but not performing up to your own expectations, I hope you find wisdom in the advice these students share.

Dear College Student Scholars:

Please permit me to tell you a story.

Shortly after I arrived at college (nearly 40 years ago) I suffered several events that had not happened to me in high school – I failed. Over and over. I blew it on quizzes, essays, and exams. I was astounded when, just a few weeks into the semester, I had failing grades in one course and grades far below my personal expectations in several others. Hence, I felt as if I didn’t deserve to be at college.

Filled with apprehension, apposite to her uncertain personal financial future, abetted by anxiety pertaining to the global economy, my neighbor yearns for my guidance in today's complex financial world. She yearns to place faith and confidence in me, in my expertise, and in my judgment. My neighbor seeks my counsel, bound faithfully to her through the power of trust.

What I write here may mean nothing to the masses of the American people. The many entries in this blog are read by perhaps only a few thousand. Here I write mainly for those who are partisans for those in the cause of the fiduciary principle. Perhaps, on occasion, a few lines from an entry in this blog will be picked up by the industry press. But mostly the readers of this blog are those already involved in the fiduciary debate.
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In the political climate of Washington, several members of the U.S. Congress have urged the U.S. Department of Labor and the U.S. Securities and Exchange Commission, both empowered by law to apply the fiduciary standard, to either slow down or stop their fiduciary rule-making efforts altogether. Often the reason expressed is concerns about the imposition of more government regulation, as well as reservations about the growth of the size of government.

In July 1934 President Franklin D. Roosevelt appointed Joseph Patrick Kennedy (the father of future President John F. Kennedy) as Chair of the newly created Securities and Exchange Commission (SEC). Despite widespread qualms about the appointment of a business person who had made a personal fortune from financial manipulation, Joseph Kennedy’s tenure proved to be just the start necessary for the new agency.
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