Fiduciaries frequently confront transnational situations. Lawyers – an archetypal class of fiduciary – have long counseled participants in cross-border transactions and conducted their own activities transnationally.1 Financial institutions – firms that often act in a fiduciary capacity2 – have provided products transnationally for centuries.3

Successful retirement requires proper planning through the decades, starting in your 20s and continuing through your 70s. The key to saving enough for retirement is to invest as much as possible, as early as possible. The bottom line is this: you must create an investment strategy where you literally do not run out of money before you die. Future financial freedom is dependent on the exercise of current financial discipline. By creating realistic budgets, adequately funding savings and retirement accounts, following wise investment strategies, and reacting appropriately to economic and market conditions, you have the best chance to fund and enjoy a future that meets your needs and goals. Chapter describes important financial planning through the decades of life, 20s, 30s,40s, 50s, 60s, 70s,80s, 90s, and 100s.

Regulators and commentators around the world are increasingly demanding that institutional investors engage in stewardship with respect to their portfolio companies. Further, the demand for stewardship has broadened from an expectation that investors engage to reduce agency costs and promote economic value to a call for investors to demand that companies serve a broader range of societal interests and objectives. This chapter considers calls for stewardship in the context of the U.S. capital markets specifically as applied to index funds. It argues that, irrespective of the merits of institutional stewardship generally, the structure of index funds and the business environment in which they operate limit their ability to engage in effective stewardship. Although index fund sponsors have had a powerful influence on their portfolio companies, well-intentioned calls for them to play a more significant role and, in particular, claims that they should incorporate non-economic objectives more broadly into their engagement strategy, are in tension with the valuable role that index funds serve in the U.S. markets by providing a low-cost diversified investment option for an increasing segment of ordinary citizens. The chapter concludes by considering the possibility of using pass-through voting to enhance the stewardship potential of index funds.

The regulation of mutual funds in the United States arguably contains the world’s most extensive system of fiduciary protection, buttressed by elaborate liability rules and a host of procedural protections and mandatory disclosure requirements designed to facilitate investor protection and choice. The intensity of this regulatory structure is a subject of perennial debate, as officials and analysts attempt to balance the cost of compliance and oversight against benefits to investors. Government officials have made numerous accommodations to ameliorate the system’s costs and facilitate industry innovations. But, the burdens of this enhanced system of fiduciary protections for mutual funds remain significant and have encouraged industry participants to evade these legal requirements in a number of ways, such as the creation of alternative vehicles for collective investments and the imbedding of regulated mutual funds into other legal structures that escape the full application of the enhanced system of fiduciary protections for mutual funds. This chapter suggests areas where aspects of mutual fund regulation might appropriately be extended to functionally similar investment vehicles.

Financial firms that offer investment advice to retail clients are beset by conflicts of interest: they may receive compensation tied to particular products, operate the financial products themselves, or be subject to other distortions. Regulators and lawmakers have looked to fiduciary and quasi-fiduciary duties to mitigate these conflicts. The paradigmatic example is the rigorous fiduciary standard imposed on registered investment advisers, but the Department of Labor’s now-defunct fiduciary rule, and the Securities and Exchange Commission’s recently adopted Regulation Best Interest similarly aim to mitigate problematic conflicts by imposing duties on those giving investment advice. These interventions largely focus on conflicts affecting which investment products investors are advised to hold, but other types of distortions, less discussed, may be just as important. This chapter offers an expanded account of conflicts of interest, how conflicts might interact, and how the fiduciary rule and Regulation Best Interest should be evaluated in light of this expanded menu of problematic incentives.

This chapter discusses the impact of institutional investors on the functioning of the financial system. Institutional investors are pooling funds and transferring economic resources to different asset classes and countries. They also transfer resources over time, and contribute to price discovery and thereby increase the efficiency of the financial system. In recent decades, the intermediation of financial assets has gradually shifted from banks to institutional investors such as pension funds, insurance companies, and mutual funds. During this process of re-intermediation, the assets of institutional investors of the EU-15 countries quadrupled from 49 per cent of GDP in 1990 to 223 per cent in 2017. This chapter provides an overview of the growth of institutional investors over the last three decades and documents the development of the main types of institutional investors.