· The financial system should enable savings, an essential step toward the accomplishment of individual financial goals as well as the fostering of the formation of capital.
· Through trust in financial institutions and financial advisors, individuals should utilize a portion of their savings to participate in the capital markets.
· Through specialization of function, our financial system should promote efficiencies in modern society, enabling the entire economy to grow larger and stronger.
· One consequence of specialization in today’s modern society, combined with the greater complexities in financial products and in the capital markets, is the necessary application of fiduciary principles.
· Through the application of the fiduciary standard of conduct trust in investment and financial services will be enhanced, leading to greater allocation of capital to the capital markets. This will fuel greater U.S. economic growth.
· The fiduciary standard will enable our fellow Americans to save more, and invest better, for their future retirement security. In so doing, burdens from government to provide for many senior citizens will be lifted, leading to less government expenditures and, over the long term, lower tax rates and burdens for all.
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Hence, absent the mid-1970’s regulation which provided such broad loopholes, we would have seen the application of the fiduciary standard of conduct under state common law upon the providers of investment advice to plan sponsors and plan participants. ERISA’s preemption, combined with a definition of “fiduciary” which is clearly at odds with the express statutory language found in ERISA and also not in accord with the burdens imposed by today’s complex financial world, has in essence negated, rather than enhanced, the protections afforded to plan sponsors and plan participants.