Fair Representation for American Investors

July 4, 2018

Independence Day has become synonymous with fireworks, barbecues and other summer traditions. Now that everyone has returned to work following the big summer holiday, it may be worth taking a moment to reflect on what the day actually represents and the reason we commemorate July 4th each year – the adoption of the Declaration of Independence by the Second Continental Congress.

There were a number of issues that the citizens of the colonies had with King George III and the way the crown treated the colonies. One of their primary rally cries to represent their grievances was “No Taxation without Representation!” The citizens felt they were being exorbitantly taxed by the crown but had no one representing their best interests and ensuring that their needs were being met.

More than two hundred years have passed, but even today, many American investors can sympathize with the issue of representation. Average Americans, through their retirement investments, hold a variety of different shares in companies, frequently through investment vehicles like mutual funds managed by investment professionals to whom the investors pay fees.

Though Main Street investors are paying the fees on their investments, it is not guaranteed that their views and best interests will be represented. The investment management firms and the proxy advisory firms from which they so often receive recommendations are under no obligation to act in the best interest of each individual investor. In fact, they are able to vote investors’ shares in any way they choose, even if individual investors don’t agree with their decisions. Effectively, investors are being “taxed” without having their interests adequately represented.

It’s time that this unfair lack of representation changed. Main Street investors need to advocate for themselves and their interests and the government needs to institute measures to ensure the interests of the average American investor are protected.

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