Jack Bogle, the legendary founder of Vanguard Investments, has urged a group of soon-to-be MBA graduates to put their clients’ interests as the highest priority when they start their professional lives because traditional professional values were being swiftly eroded.

“;Once a profession in which business was subservient, the field of money management and Wall Street has become a business in which the profession is subservient,” Bogle said after accepting an honorary degree of Doctor of Human Letters from Georgetown University. Over the past two centuries the US had moved from being an agricultural economy, to a manufacturing economy, to a service economy and now to a predominantly financial economy. “But our financial economy, by definition, subtracts from the value created by our productive businesses … The more that our financial system takes, the less our investors make,” he said, noting that most in his audience were likely to end up in financial services. Bogle, generally credited with launching the world’s first indexed mutual fund, in 1975, quoted the writer Kurt Vonnegut (‘Slaughterhouse Five’) who told a story about being the guest of a wealthy hedge fund manager with fellow writer, the late Joseph Heller (‘Catch 22’). Vonnegut told the other writer that their host made more money in a single day than Heller would have made from all the royalties from his famous book. Heller responded: “Yes, but I have something he will never have – enough.” Bogle urged the soon-to-be-minted graduates to consider the role of ‘enough’ in business and entrepreneurship in society. “When we add up all those hedge fund fees, all those mutual fund management fees and operating expenses, all those commissions to brokerage firms and fees to financial advisers, investment banking and legal fees for all those mergers and IPOs, and the enormous marketing and advertising expenses entailed in the distribution of financial products, we’re talking about some $US500 billion per year. “That sum, extracted from whatever returns the stock and bond markets are generous enough to deliver to investors, is surely enough, if you will, to seriously undermine the odds in favour of success for our citizens who are accumulating savings for retirement.”

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