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资产管理的法理基础与运行模式：美国经验及对中国的启示 (The Legal Basis and Operational Models of Asset Management: The US Experiences and Implications for China)

Chinese Abstract: 中文摘要：《资管意见》的上位法依据争议很大，本质上是对资产管理的法理基础和运行模式存在分歧，在借鉴美国等境外经验时要注意实质重于形式。美国的投资公司是资产管理的主要载体，包括多种不同的组织形式，而投资顾问在提供咨询建议之外，也为客户管理资产，经常是资产管理的实际主体。投资顾问推动投资公司（共同基金）的设立，并负责资产管理，接受投资公司董事会和股东大会的监督。相比而言，我国的资产管理以信托契约型为主，较少采用公司等其他组织形式；美国采用“投资者—投资公司—投资顾问”架构，而我国是“投资者—管理人”架构；美国的投资顾问与我国的投资顾问在功能上迥异，因而我国不宜照搬美国《投资顾问法》；我国资产管理在组织形式上应当允许多元，但在行为监管上应当统一。 English Abstract: The Opinion on Asset Management has seen a heated debate on its legal basis, reflecting the differences of views on the underlying legal relationships of asset management and its models of operation. When examining overseas experiences, notably the US, one needs to focus more on substance than form. The main vehicle for carrying on asset management in the US is the investment company, which can take many different organizational forms. Investment advisors do not only provide investment advice, but more importantly, manage assets for their clients. Investment advisors promote the establishment of mutual funds and then provide asset management services under the supervision of the board of directors and shareholders meeting of the investment company. In contract, China’s asset management mainly takes the form of trust, and seldom uses other forms such as companies. While the mutual fund in the US adopts ‘investor-investment company-investment advisor’ structure, it is structured as ‘investor-manager’ in China. From a functional perspective, the US-style investment advisor is very different from the investment advisor in China. It is suggested that China should allow asset management to take a diversity of business forms but adopt a consistent standard for regulating functionally similar business activities.

Reducing Legal Uncertainty and Regulatory Arbitrage for Robo-Advice

Robo-advisers are online financial adviser services that use algorithms to create investment recommendations without human input. They deliver advice at low costs and they are growing in popularity. However, the nature of the interaction between client and machine raises many legal questions under the applicable EU regulation. This article argues that robo-advisers provide investment advice within the meaning of the Second Markets in Financial Instruments Directive (MiFiD2). They are subject to authorisation by the national regulator and ongoing conduct requirements. It might be tempting to introduce regulatory sandboxes to address the persisting legal uncertainties in practice, but such a regulatory change does not seem likely in the near future. Instead, regulatory arbitrage should be reduced by a uniform application of the MiFiD2 framework throughout the EU. Regulators and courts should also be aware that software replacing human advisers diverges from the basic idea of human interaction that forms the basis of contract law. Investment firms are able to use new technology in the services they provide. However, as this means introducing new risks for investors, the investment firm should be subject to a strict liability regime for failures of the respective technology (for example, the unavailability of the service).

Reducing Legal Uncertainty and Regulatory Arbitrage for Robo-Advice

Robo-advisers are online financial adviser services that use algorithms to create investment recommendations without human input. They deliver advice at low costs and they are growing in popularity. However, the nature of the interaction between client and machine raises many legal questions under the applicable EU regulation. This article argues that robo-advisers provide investment advice within the meaning of the Second Markets in Financial Instruments Directive (MiFiD2). They are subject to authorisation by the national regulator and ongoing conduct requirements. It might be tempting to introduce regulatory sandboxes to address the persisting legal uncertainties in practice, but such a regulatory change does not seem likely in the near future. Instead, regulatory arbitrage should be reduced by a uniform application of the MiFiD2 framework throughout the EU. Regulators and courts should also be aware that software replacing human advisers diverges from the basic idea of human interaction that forms the basis of contract law. Investment firms are able to use new technology in the services they provide. However, as this means introducing new risks for investors, the investment firm should be subject to a strict liability regime for failures of the respective technology (for example, the unavailability of the service).

Analyzing Analyst Research: A Review of Past Coverage and Recommendations for Future Research

As visible and knowledgeable experts who constantly collect, analyze, and disseminate information about the future prospects of publicly listed firms, financial analysts fulfill an important information brokerage and monitoring function for investors. By providing investment advice, financial analysts also influence the demand for a firm’s stock and thus its price. Executives pay close attention to financial analysts’ earnings forecasts and recommendations, so much so that they are frequently criticized for excessive focus on their forecasts at the expense of the long-term interests of the firm. But while research on analysts in strategic management is steadily growing, we lack a coherent understanding of the extent and nature of analysts’ diverse influences on executives’ and investors’ decision making and the context in which analysts operate. This is largely due to the fragmentation of the literature and the absence of prior reviews or meta-analyses of the topic. By organizing, synthesizing, and analyzing extant research efforts on analysts in the various domains of strategic management research, we aim to advance our knowledge on the influence of analysts on firms and investors. Further, we hope that our analyses and recommendations help further increase research coverage on this important organizational stakeholder.

Are Robots Good Fiduciaries? Regulating Robo-Advisors Under the Investment Advisers Act of 1940

In the past decade, robo-advisors — online platforms providing investment advice driven by algorithms — have emerged as a low-cost alternative to traditional, human investment advisers. This presents a regulatory wrinkle for the Investment Advisers Act, the primary federal statute governing investment advice. Enacted in 1940, the Advisers Act was devised with human behavior in mind. Regulators now must determine how an automated alternative fits into the Act’s framework. A popular narrative, driven by investment advice professionals and the popular press, argues that robo-advisors are inherently structurally incapable of exercising enough care to meet Advisers Act standards. This Note draws upon common law principles and interpretations of the Advisers Act to argue against this narrative. It then finds that regulators should instead focus on robo-advisor duty of loyalty issues because algorithms can be programmed to reflect a firm’s existing conflicts of interest. The Note concludes by arguing for a shift in regulatory focus and proposing a two-part heightened disclosure rule that would make robo-advisor conflicts of interest more transparent.

The Other Securities Regulator: A Case Study in Regulatory Damage

Although the Securities and Exchange Commission is the primary securities regulator in the United States, the Department of Labor also engages in “securities regulation.” It does so by virtue of its authority to administer the Employee Retirement Income Security Act (ERISA), the statute that governs the investment of retirement assets. In 2016, the DOL used its securities regulatory authority to adopt a rule that, for the first time, designates securities brokers who provide investment advice to retirement investors as fiduciaries subject to ERISA’s stringent transaction prohibitions. The new rule’s objective is salutary, to be sure. However, this Article shows that, by way of its reformation of many advisers’ relationships with their retirement-investor customers, the “fiduciary rule” imperils retirement investors in ways that are not immediately evident and that other scholars have not noticed. First, the rule promotes a particular investment strategy — namely, passive investing — for all retirement investors, regardless of their individual needs or objectives. Second, as a thought experiment demonstrates, the rule portends a constriction of most retirement investors’ participation in the securities markets and a still-wider gap, in terms of investment opportunities and performance, between these investors and their “sophisticated” counterparts. Despite these difficulties and speculation that the Trump administration would scuttle the rule, moreover, the rule’s effects are likely enduring. Given the damage that the fiduciary rule threatens to inflict on retirement investors, the DOL’s adoption of it is an episode of failed rulemaking — one that, as this Article contends, may be traced to doctrinal factors: U.S. securities regulation is based on the notion that regulation should be neutral as among firms’ business and financial objectives and should harness, without necessarily abolishing, financial professionals’ conflicts of interest. Yet with its fiduciary rule, the DOL has effectively forsaken the principle of neutrality and deployed a scorched earth strategy against conflicts. With a view toward addressing the special concerns that shared regulatory authority creates, the Article delves into the lessons arising from this episode and how policymakers might better promote regulatory objectives and sound policy going forward.

Minimizing lifetime poverty with a penalty for bankruptcy

We provide investment advice for an individual who wishes to minimize her lifetime poverty, with a penalty for bankruptcy or ruin. We measure poverty via a non-negative, non-increasing function of (running) wealth. Thus, the lower wealth falls and the longer wealth stays low, the greater the penalty. This paper generalizes the problems of minimizing the probability of lifetime ruin and minimizing expected lifetime occupation, with the poverty function serving as a bridge between the two. To illustrate our model, we compute the optimal investment strategies for a specific poverty function and two consumption functions, and we prove some interesting properties of those investment strategies.

A Dynamic Asset Allocation Approach to Investing

The strategic asset allocation approach utilized by the majority of investment institutions to provide investment advice and guidance is based on unrealistic stock return assumptions making the approach less efficient and effective than a dynamic asset allocation approach. This paper proposes utilizing dynamic asset allocation forward looking return assumptions to identify the most efficient and prudent asset allocation strategy to investment in. We find a cumulative asset growth advantage of 62% vs. a 100% stocks allocation and 32% vs. a strategic asset allocation approach over two full market cycles since 2000.

Broker-Dealer: A Fiduciary by Any Other Name?

Broker-dealers, unlike investment advisers, are not regulated as fiduciaries when providing investment advice, even though broker-dealers are holding themselves out as financial advisors and offering virtually identical services to investors. The lack of consistent regulation of financial service providers arises from the structure in which advice historically has been delivered. Financial services regulation since the Great Depression has developed along roughly dual tracks: laws governing the sale of financial products, which may or may not require that the products be suitable for the customer, and laws governing investment advice, which impose a fiduciary requirement on the adviser to act solely in the best interests of the client. Even with the inconsistent regulatory and statutory framework, under common law, brokers have historically been held to a fiduciary standard of care when providing personalized investment advice to retail customers or when holding themselves out to the public as trusted financial advisors who provide unbiased investment advice. In situations where brokers were determined not to be fiduciaries, they were solely providing transactional assistance to clients (acting as salespeople). This Article begins by examining the historical origins of broker-dealers as fiduciaries; uses statutory construction to give effect to the clear intent underlying Congress’ enactment of the Investment Advisers Act of 1940 (Advisers Act), specifically the broker-dealer exemption included in Section 202(a)(11); and provides a history of the SEC’s interpretation of the broker-dealer exemption in the Advisers Act. The Article then analyzes judicial treatment of broker-dealers, including the legal reasoning of why the Securities Exchange Act of 1934 (Exchange Act) provides a lower level of protection and was never meant to regulate personalized investment advice, examining a broker’s right to lie by the use of “puffery” and “sales talk”, and discusses the issue of financial advisors’ ability to “switch hats” and provide services under different standards of care. The Article concludes by opining how having two different standards of care regulating identical conduct is harmful to consumers and provides solutions for the SEC to move forward including the removal of the broker-dealer exemption from the Advisers Act and the creation of a new uniform fiduciary duty for broker-dealers and investment advisers under Section 913 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act).

SEC releases study on the fiduciary duty of investment advisers and broker‐dealers

PurposeThe purpose of this paper is to explain a study released by the Securities and Exchange Commission on January 21, 2011, the “Fiduciary Study,” concerning legal and regulatory standards of care for providing investment advice and recommendations to retail customers.Design/methodology/approachThe paper explains the Fiduciary Study's concern that retail investors do not fully understand the roles played by, and the different standards of care that apply to, investment advisers and broker‐dealers. It summarizes the SEC's core recommendations concerning uniform investment adviser and broker‐dealer standards for conduct, avoidance of conflicts of interest, fiduciary duties, principal trading, duty of care owed to investors, personalized investment advice about securities, and investor education. It summarizes the SEC's recommendations on harmonizing investment adviser and broker‐dealer regulations on advertising and other communications, use of finders and solicitors, supervision, licensing and registration of firms, licensing and continuing education requirements for professionals, and books and records.FindingsThe SEC's core recommendations are designed to clarify the respective roles of, and establish uniform standards for, investment advisers and broker‐dealers, so that retail investors will be better informed and protected.Originality/valueThis paper provides a useful summary and practical advice from experienced financial services lawyers.

Harmonization vs. Demarcation: The Problems with a Broker Fiduciary Duty and the Benefits of the Merrill Rule

During summer of 2009, Treasury Department, under Treasury Secretary Timothy Geithner, proposed several financial reforms to House Financial Services Committee leader Barney Frank of Massachusetts and Senate and Banking Committee leader Christopher Dodd of Connecticut. The Treasury Department proposed legislation for strengthening investor protection through imposing a fiduciary duty on brokers, called Investor Protection Act of 2009. Title IXA provides that the standards of conduct for all brokers, dealers, and investment advisers, in providing investment advice about securities to retail customers or clients, [ ] shall be to act solely in interest of customer or client without regard to financial or other interest of broker, dealer or investment adviser providing advice. In May of 2009, SEC Commissioner Elisse B. Walter gave a speech in Washington addressing Mutual Fund Directors Forum. Her speech, entitled Regulating Broker-Dealers and Investment Advisers: Demarcation or Harmonization?, called for imposing fiduciary duty on brokers in order to harmonize obligations and requirements of broker-dealers and investment advisers. Rather than implementing harmonization, whereby investor maintains his ignorance, Congress should give SEC power to implement a demarcation policy. The SEC tried a demarcation approach with investors in 2005 with Rule, but with little success. The failure of Merrill Rule was not due to inadequate disclosure, but rather pressure from investment advisers and, eventually, a case before D.C. District Court that terminated idea of SEC authority to adopt rule before it had opportunity to succeed. This paper argues against harmonization and imposing a fiduciary duty on brokers. The term fiduciary is too amorphous and too difficult to implement such that, whatever definition settled upon, term will have no real impact on changing industry practices or helping investors. Imposing a duty interferes with traditional states’ rights and will cause issue to trickle into federal courts. A fiduciary duty for brokers ignores history of distinction between brokers and investment advisers and nature of a broker as a salesman. Finally, imposing a fiduciary duty on brokers is a half-hearted attempt at purported goal and fails as genuine, complete harmonization. Part III of paper will focus on other methods for addressing problem of overlap between two professions, primarily ways to achieve demarcation, and why Merrill Rule is best available option.

The Fiduciary Study: A Triumph of Substance Over Form?

In the months preceding the enactment of the Dodd‐Frank Wall Street Reform and Consumer Protection Act of 2010, public interest groups and financial planners lobbied Congress to impose a fiduciary duty on broker-dealers that provide investment advice. Congress deflected this issue to the Securities and Exchange Commission, however. The Act requires the Commission to conduct a six-month study of the regulation of investment advisers and broker-dealers and grants it rulemaking authority to act on the study’s findings. Although the issue of broker-dealers’ fiduciary duties has long been framed as a problem of different standards of conduct applying to advisers and broker-dealers with respect to their investment advisory activities, this essay argues that this should not be the guiding principle for the SEC’s study. Rather, the focus of the study should be the efficacy of principles‐based regulation as to broker-dealers’ investment advisory activities. Furthermore, the Commission should consider the broker-dealer fiduciary duty in the context of other traditional models of legal analysis, including: public versus private rights of action, allocation of regulatory oversight authority, comparative dispute resolution mechanisms, federalism, procedural rules, and separation of powers.

Subjectivity in Judgments

Asset allocation is a critical component of portfolio performance and is a significant component of the advice provided by financial plan-ners. The fiduciary obligation of financial planners is to provide investment advice that is appropriate to a client9s personal circumstances. Academic research has found evidence of inconsistencies in advice provided by financial advisors. Using a survey of 352 Australian financial planners, the article also finds inconsistencies in a hypothetical asset allocation decision. These inconsistencies may be attributed to the presence of subjective judgment in the decision-making process due to the presence of various psychological factors such as expectations, traits, and biases, the lack of any standardized method for collecting information from clients, and different assumptions, perceptions, and interpretations based on the financial planner9s own knowledge, experience, intuitions, and skill sets. The choice of financial planners influences the asset allocation and ultimately the investment returns and outcome. <b>TOPICS:</b>Wealth management, portfolio construction, in portfolio management, risk management

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Comments on Richard Zeckhauser's Investing in the Unknown and Unknowable

Richard Zeckhauser’s important paper “Investing in the Unknown and Unknowable” provides a very different perspective on the investment process than the approach taken in either standard treatments of financial economics or more recent behavioral finance approaches. He focuses attention on the very large class of investments that are one-off and whose payoffs are not just difficult to predict, but have a range of possible outcomes that is difficult to enumerate. Such an emphasis is surely welcome. Any economist, particularly one who has not had extensive real world experience, will learn a great deal from this paper. While much of the paper is directed at providing investment advice to its readers, its significance goes far beyond the investment process. Investment decisions are among the easiest for economists to study because the objective — making money — is clear, allowing success and failure to be easily judged. Much more consequential decisions, such as whether to invade Iraq, how to combat global warming, choosing whom to marry or how many children to have or what house to buy, have important unknown and unknowable aspects as well. And so lessons learned about how investment decisions and how they are and should be made are significant far beyond the field of finance.In my comments on this paper, I will focus first on the investment advice contained within and then conclude with a broader reflection on the implications of Zeckhauser’s analysis. I have no doubt that the vast majority of us would do very well to take investment advice from Richard Zeckhauser. The examples cited in his paper are, I suspect, not isolated. The same attributes that make him a world class bridge player contribute to his great shrewdness in making investment decisions.This paper is a comment on Investing in the Unknown and Unknowable by Richard J. Zeckhauser which can be found at: http://ssrn.com/abstract=2205821.

Bell Companies as Profitable Wholesale Firms: The Financial Implications of UNE-P

Recent reports by financial analysts on the financial consequences of UNE-P sales for Bell Operating Companies have drawn additional attention to long-standing complaints by the BOCs that such sales are confiscatory and amount to subsidized competition. This Policy Paper subjects the conclusions of these financial studies to careful scrutiny, and finds that they are largely without merit. Errors in both the calculation of unbundled element revenues, and in the wholesale costs of providing unbundled elements, are identified. Using actual payments by a representative CLEC and publicly available ARMIS expense data, we obtain realistic revenue and current cost figures usable for EBITDA type financial analyses. Our analysis suggests that positive EBITDA margins are the rule. Even the inclusion of depreciation and amortization does not materially alter this conclusion, as EBIT margins are also found to be positive for each BOC. In addition, because these analysts' reports are intended exclusively to provide investment advice, they are not useful for evaluating the social impacts of required element sales and, therefore, should not provide the basis for public policy decision-making.

The dynamics of change innovation and risk in corporate wholesale finance

Examines the traditional function of commercial banks as financial intermediaries between deficit and surplus sectors. Fundamental to this function has been the assumption that banks can intermediate at lower costs than those prevailing with direct financing arrangements, but developments in corporate wholesale financing over the past 20 years or so have undermined this “cost imperative” for large companies. This has resulted in disintermediation of commercial banks by large companies and introduced a large degree of product innovation in wholesale corporate finance. These innovations have meant that commercial banks have become more investment bank oriented. Traditional on‐balance sheet services for large companies have been largely replaced by off‐balance sheet activities such as providing investment advice and making placements. These changes in business activity have had an effect on the commercial banks’ principal sources of income and the risks inherent in their business. Innovations in corporate wholesale banking have implications which go beyond the corporate wholesale market and have changed the commercial banks’ “business philosophy” and methods of management.