Breakout

It’s Time to Level the Playing Field: CFA Institute

Jeff Macke
Breakout

Despite stocks at record highs and promises from Washington, DC to rebuild a more transparent and trustworthy financial system, there's little evidence of change since the 2008 meltdown. Whether it's suspiciously selective enforcement of insider trading laws or JP Morgan's (JPM) London whale, it's obvious that well-placed individuals and financial institutions continue to operate by a different set of rules than Main Street.

If the government can't or doesn't seem much inclined to take tangible actions, then who will? Enter the CFA Institute of America and the Future of Finance Project being launched today. The CEO John Rogers says his program has the specific goal of "getting people back on track for their long term retirement programs."

The CFA Institute sees the Future of Finance project as one leg of a three-pronged collective approach that will work in conjunction with stronger regulations and enforcement to rebuild confidence. The creation of regulations isn't a problem. We have plenty of rules out there being violated, or bent, as a matter of course. Stronger enforcement of existing laws would be an enormous step forward but remains a question mark. The bottom line is the only defense investors have is their own education. Rogers says that starts with teaching investors what they should expect and demand from their financial advisers.

To that end, the CFA Institute has created a Statement of Investor Rights. Individuals should demand their advisors operate in accordance with these rights or take their money elsewhere.

Rogers' group recognizes their limitations, but their program fills a void in information. "There's got to be some clarity and transparency around what the rules of the games are and we're seeking to add some more light to the subject."

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