But it's one thing if you plunk down (and ultimately lose) a couple hundred on that “sure thing” beanie baby. It's quite another if following the crowd ends up costing you hundreds of thousands of dollars in retirement savings.

It's hard-wired into our frail human psyche to act on instinct, not reason. Retirement savers who fail to demonstrate the discipline to control this natural instinct can hurt themselves and those around them (see, “The Shocking Truth of Supply and Demand in the Markets and the Retirement Saver's Best Interest,” FiduciaryNews.com, March 6, 2018).

It is the job of the fiduciary to stand between the temptation of behavioral economics and the harsh dispassion of classical economics.

Emotion may win in the moment, but reason rules in the long run.

Think about those beanie babies. At the height of the craze, people really did make money buying and selling beanie babies. Eventually, though, the desire faded and the proverbial last man standing was left hold the bag of plush toys with nary a buyer in sight.

Think this applies only to fads? Think again.

Think about the attitudes of real estate buyers in the early 2000s. There wasn't a home in Florida that couldn't be flipped for two, three, even four times the original buying price. Until the buying stopped. Sitting atop its “sure thing” wall, real estate had a great fall. All the realty agents, all the contractors, all the mortgage lenders couldn't put real estate back together again.

There's only one sure thing about any industry, any asset class, any market: Things go up and things go down. The rational man (and woman) knows this. However, no matter how efficient we are as individuals, as a collective hoard the only thing we're efficient at is inefficiency.

There is a certain allure (and societal truth) to the concept of “the madness of crowds.” Joining all the lemmings isn't just enticing, it simply makes us feel so good. We're part of a team, and we all enjoy being part of a team.

Retirement savers need more than a team. They need a coach. In all the hubbub about the fiduciary rule, it seems too many have forgotten the roots of “fiduciary.” Because what's measurable is itself enticing, we've focused too much on numbers – the quantitative aspect of fiduciary. But fiduciary has a qualitative aspect, too.

We get our concept of fiduciary from the traditional role played by a trust officer. That role, so brilliantly portrayed by George Coulouris as the bank officer who was the legal guardian to Charles Foster Kane in Citizen Kane, goes far beyond money and numbers. It's about teaching the right thing.

Note, I didn't say it's about “doing” the right thing. The fiduciary must do the right thing, but the fiduciary can't prevent a beneficiary from not doing the right thing (“I think it has something to do with free will” [bonus points if you know what movie this quote is from]). The fiduciary, then, acts like a coach, guiding and directing the beneficiary towards the right thing.

So, yes, the fiduciary must study classical economics to understand how the market works.

But the fiduciary must also study behavioral economics to understand how the mind works. In this way, the fiduciary is prepared to help retirement savers make better decisions – whether it be in their retirement plan or at their neighborhood grocery store.