Vanguard founder Jack Bogle feels like Dr. Frankenstein

Jack Bogle, the founder of Vanguard, made some provocative comments in his speech today to the Boston Security Analysts Society.

Bogle doesn't like how, as he sees it, investment management has shifted from being a profession to being a business focused on profits. This has been accompanied by a shift in ownership from private to public to ownership by conglomerate. He cited the Columbia Management operation, which has sucked in perhaps a dozen investment management firms, as an example of conglomerate ownership.

As a result, he said:

• "Investment management process is redefined as manufacturing."
• "Ethical standards are compromised."
• "Salesmanship replaces stewardship."

An audience member asked what form of ownership Bogle would advise for Putnam Investments. "Be wise. Mutualize," said Bogle. Marsh & McLennan has fed at that trough for many years. Now it's time to let the shareholders feed, he said.

On the topic of 12 b-1 fees, Bogle said, "I have been known as one of the founders of the 12b-1 fee. I feel like Dr. Frankenstein."