Pope Francis Supports Fiduciary Standard for FAs
The Department of Labor’s fiduciary rule may be on its last legs, but the idea of a universal fiduciary standard just got a boost from the pope himself, according to InvestmentNews.
Pope Francis, in a bulletin issued by the Vatican, takes issue with various practices in the financial industry, including overall selfishness and the use of specific products such as credit default swaps, the publication writes.
The financial advice industry isn’t spared either. In particular, the pope takes aim at the “morally questionable” practice of excessive trading for the sake of boosting revenue for the firm, according to InvestmentNews. The pope also slams advisors who don’t act as fiduciaries when “offering instruments of saving, which, compared with some banks, the product of others would suit better the needs of the clients," the publication writes.
He also admonishes advisors who act based on "the scarcity of an adequate diligence or even a malicious negligence” when it comes to the “protection of related interests to the portfolio of their clients,” according to InvestmentNews.
The pope also has a general recommendation for financial advisors “managing” client assets.
"The saving itself, when entrusted in the expert hands of financial advisers, needs to be administered well, and not just managed," according to the Vatican bulletin cited by the publication.
"As an observer of the pope, I’m not surprised but delighted he has put fiduciary conduct and advisers in the spotlight. I hope that the many staunchly Catholic advisers to president Trump take his words seriously," Knut Rostad, president of the Institute for the Fiduciary Standard and a staunch supporter of the now-vacated DOL fiduciary rule, tells InvestmentNews.