At the 23rd Annual SRI Conference held in Connecticut earlier this month, there was a breakout session titled, Occupy Wall Street and SRI: Expanding Common Ground and Charting New Territory.  The idea of the session was that both the Occupy and SRI movements share a common ground in believing that acting mostly on short-term goals often leads to long-term detriment. At the beginning of the session, one young woman in attendance expressed her frustration that the Occupy movement, as she understood it, had died as demonstrations in various cities faded.

Although not directly, the panelists essentially responded to this question by pointing out how the Occupy movement continues, although in subtler ways.  They pointed out, for example, how the Move Your Money Campaign continues to have an impact on banks and how the Occupy movement put issues related to the 99% (vs. the 1% with the highest incomes) on the map.  The young woman wanted change now, or at least faster than the current pace. But change rarely happens that way; probably because it is very difficult even under the best of circumstances.  In Aesop's fable The Tortoise and the Hare, the moral of the story was slow and steady wins the race.  Aesop was on to something.

At fi360, we have been advocating change with respect to fiduciary responsibility for 13 years now.  Often times we have been frustrated by the pace of change and the seemingly one step backwards for every two steps forward.  When anyone is in the business of providing investment advice, we believe they should be willing to assume a fiduciary role and be legally bound to putting the client's interest first.  We have and continue to support a regulation that would extend the fiduciary standard to all who provide investment advice to retail investors and an expanded DOL fiduciary definition.  While those would both be faster fixes, both have been stalled repeatedly and are essentially on hold until after the upcoming election, which will have a significant impact on how both of those initiatives proceed. These may be steps back, but we continue to see slow, steady progress forward.

There are other market forces and new regulations at work that are moving us further down the fiduciary road.  Competitive pressure, for example, is having an impact regardless of what happens through regulation.  And service provider disclosure [408(b)(2)] and participant disclosure [404(a)(5)] regulations that became effective this summer are reinforcing this competitive pressure as more information becomes available regarding services. fiduciary status, and compensation to plan sponsors and their participants; and this will extend to other clients soon enough.

So where we share the passion of this young woman engaged in the Occupy Movement for wanting to see change now, patience is required and rather easy when you have no choice.  In any case, as we survey the last 13 years, much has happened accross the fiduciary landscape and many who were involved when we started continue to be involved.  Please continue to do so!  Persistent effort eventually pays off and like the tortoise, in the end it really does win the day.