The Investment Advisers Act of 1940 is the last of six federal securities laws passed in the wake of the 1929 stock market crash and the Great Depression. The Advisers Act (the “Act”) is of enormous importance. Approximately 14,000 investment advisers are registered with the US Securities and Exchange Commission (SEC), and another 4500, such as hedge fund and venture capital fund advisers, file reports with the SEC.1 Many of the largest investment advisers are household names, such as BlackRock, Vanguard, State Street, and Fidelity. The amount of assets under management held by SEC-registered advisers in 2020 was close to $100 trillion, an astounding figure.2 It is hard to imagine an economic sector more important to both Wall Street and Main Street.

The topic of investor protection has occupied investors, regulators, academics, and courts since at least the Great Crash of 1929 and the Great Depression of the 1930s. The topic, however, exploded in importance after the 2008 financial crisis and the Bernard Madoff Ponzi scheme of the same year. In addition, the substantial growth in the equity markets and the surge in retail investors’ exposure to stocks have sparked questions over whether regulators are doing all they can to protect investors.

Debates over fiduciary status gained national prominence with the Department of Labor’s 2016 attempt to define an investment adviser fiduciary under the Employee Retirement Income Security Act in 2016. The DOL’s fiduciary rule, however, was vacated by the courts, leaving doubt as to whether and when an investment advisor is considered a fiduciary under ERISA. Moreover, many believe that earlier guidance from the DOL on who is an investment advisor fiduciary is too narrow to protect retirement investors. What is less well known is that many of the debates in ERISA over investment advisor fiduciaries track larger debates in the common law regarding fiduciary status. This chapter explores three parallels between the common law and ERISA in determining fiduciary status. The first is the structure of fiduciary categories and the division between categorical and ad hoc fiduciaries. The second is the tendency to look to whether one person has discretionary authority to determine whether the first person is a fiduciary. The third is the challenge raised by advice giving. Both common law courts and ERISA jurisprudence struggle to determine whether and when advisors, who lack discretionary authority, should be considered fiduciaries. The chapter concludes that trust can serve as a foundation for an advisor’s fiduciary status both in the common law and under ERISA.

This introduction traces aspects of the history of fiduciary duties in business law and scholarship. Despite fiduciary law’s centrality to business law, the chapter describes how the contractarian revolution of the 1980s contributed to the marginalization of fiduciary duties, both in theory and doctrine. However, subsequent developments, both in case law and in scholarship, have questioned some of the core assumptions of the early wave of contractarian theory. The introduction outlines three critiques that scholars have levied against the early contractarians’ view of fiduciary duties, and connects these critiques to the eighteen chapters in the volume. The introduction also provides a roadmap of our contributors’ arguments.