As 2011 chairman of the Securities Industry and Financial Markets Association, John Taft had a direct role in the financial reform debate. Here, he tells Managing Editor Lorie Konish about his new book, Stewardship: Lessons Learned from the Lost Culture of Wall Street, and how advisors can help guide the industry toward rebuilding trust.

1. What is stewardship and why did you decide to focus on it with this book?
Stewardship is defined as responsibly managing what others have entrusted to our care. It is, or should be, the core principle behind what we do as financial institutions and what we do as a financial system. The reason that I wrote the book is I feel that we have lost touch as an industry with that core principle. The only way we're going to restore confidence is to reconnect with the core principle of stewardship. Stewardship is the "choice for service," author Peter Block says. It is about seeing the impact of your actions on others and it's about leaving the world a better place than you found it.

2. Two years after Dodd-Frank was signed, how much progress have we made?
I am—and was, as chairman of SIFMA—pro reform. The regulatory system needed to be overhauled, because the world is very different today than it was when many of our current laws were written, i.e. at the beginning of the last century. But I am pro responsible reform; pro reform that makes the system safer and sounder without compromising economic growth. There are some good elements in Dodd-Frank and the Basel III reforms, and there are some really unnecessary elements of regulatory reform, and there are some harmful elements of regulatory reform. What we're facing right now with regulatory reform, as much as the public is frustrated by it, is a long, painful but appropriate process of trying to implement reform in a way that balances the objectives of the reform. It takes a long time, and that's not a bad thing. We're about 30% of the way through implementing Dodd-Frank. Already the system is safer, sounder and more secure.

3. What about the fiduciary standard?
That's part of the 70% that has not been implemented. There is the authority to implement it, but it is not a requirement with Dodd-Frank. SIFMA supports a fiduciary standard. There is no question the fiduciary standard is the gold standard of investor protection. But there's a right way and a wrong way to do it. We support a standard of fiduciary care, provided that it preserves client access to the full range of products and services that they get today, and protects choice as to who they work with and how they pay for those services. If client benefits are preserved, by definition it will be a good rule.

4. How can the individual financial advisor practice stewardship?
One of the things I'm proudest of, running the business I run, is how committed our financial advisors are. And I would make the case broadly that financial advisors across the private client and wealth management business are committed to their clients. They are tenacious advocates for their clients. They care deeply for their clients. The industry can take a lesson from the way financial advisors as a group serve and care about their clients. What we need to do is look to that and apply those lessons more broadly.

5. How are the proceeds of the book being allocated?
All proceeds will go to charity. I've created a fund at a charitable foundation and the proceeds of the sales of the book go there. I will make my ultimate decision about which charities to direct the proceeds to based on what I hear from readers. But they'll all be stewardship causes.

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