What about online investment services, so-called robo advisers? Are they fiduciaries? Yes, writes Norb Vonnegut. Robo advisers stand on the buy side – that is, the client's side – not the sales side.
But as Vonnegut illustrates, even human fiduciaries can succumb to temptations offered by the sales side. Remember when bank trust officers were criticized for pushing the bank's own products? In Vonnegut's example, the tables are turned: a trust officer puts a client in an outsider's relatively expensive S&P index fund instead of the bank's lower-fee version.
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Norb Vonnegut has written novels skewering brokers (Top Producer) and hedgies (Gods of Greenwich). I hereby remake my resolution to read them.
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