20. Professional Money Managers and their Influence

Financial Markets (2011) (ECON 252)
Professor Shiller argues that institutional investors are fundamentally important to our economy and our society. Following his thoughts about societal changes in a modern and capitalist world, he turns his attention to the fiduciary duties of investment managers. He emphasizes the "prudent person rule," and critically reflects on the limitations that these rules impose on investment managers. Elaborating on different forms of institutional money management, he covers mutual funds, contrasting the legislative environments in the U.S. and Europe, and trusts. In the treatment of the next form, pension funds, he starts out with the history of pension funds in the late 19th and the first half of the 20th century, and subsequently presents the legislative framework for pension funds before he outlines the differences of defined benefit and defined contribution plans. Professor Shiller finishes the list of forms of institutional money management with endowments, focusing on investment mistakes in endowment management, as well as family offices and family foundations.
00:00 - Chapter 1. Assets and Liabilities of U.S. Households and Nonprofit Organizations
11:30 - Chapter 2. Human Capital and Modern Societal Changes
17:04 - Chapter 3. The Fiduciary Duty of Investment Managers
28:23 - Chapter 4. Financial Advisors, Financial Planners, and Mortgage Brokers
33:53 - Chapter 5. Comparison of Mutual Funds between the U.S. and Europe
37:58 - Chapter 6. Trusts - Providing the Opportunity to Care for Your Children
43:14 - Chapter 7. Pension Funds and Defined Contribution Plans
58:23 - Chapter 8. History of Endowment Investing
01:02:34 - Chapter 9. Family Offices and Family Foundations
Complete course materials are available at the Yale Online website: online.yale.edu
This course was recorded in Spring 2011.