Introducing the 13 Money Champions of 2016

Invented a fairer stock market.

If Brad Katsuyama gets his way, it will no longer be possible for a handful of professional investors to get an early peek at the trading of other market players. They won’t be able to jump in and fill orders at less-than-perfect prices -- and pocket the difference.

His brainchild is a new stock exchange called the Investors Exchange, or IEX. If it succeeds, IEX will be a less expensive way for large traders like mutual funds to buy and sell stocks on behalf of ordinary investors. “Cheaper trades boost investment returns,” explains Joe Brennan, head of the equity index group at fund giant Vanguard, which has been complaining about high-speed trading abuses for years.

At issue is so-called high-frequency trading, a strategy that uses powerful computers to rapidly buy and sell stocks, often looking to gain advantage over competitors by mere fractions of a second. Katsuyama’s IEX battles back by slowing down trading by 350-millionths of a second—a “speed bump” so small that humans don’t notice, but that eliminates high-frequency traders’ edge.

Got us the fiduciary rule.

After nearly a decade of trying, the U.S. Department of Labor finally got it done: a rule that will require financial advisers to act in their clients’ best interests when managing retirement assets—in other words, to act as fiduciaries. That rule is set to go into effect next year in large part because of Phyllis Borzi, who jump-started the campaign when she joined the department as assistant secretary of labor for employee benefits security in 2009.

The fiduciary standard is aimed at financial pros who push expensive or risky investments that pay them high commissions but aren’t necessarily the best choice for their clients. They are allowed to do this under a standard that requires only that investment recommendations be “roughly suitable.” According to a 2015 White House Council of Economic Advisers report, the resulting conflicted advice costs savers, on average, 1% a year in returns, or $17 billion.

The Labor Department was forced to withdraw its initial proposal in the face of fierce industry and congressional opposition, but Borzi refused to give up. She formed alliances with consumer groups, brought industry executives to the table, and convinced the White House to use its bully pulpit on the issue. “Phyllis Borzi was the linchpin,” says Barbara Roper, director of investor protection at the Consumer Federation of America. “It would not have happened without her.”

Convinced us to index.

For investors, 2016 was the year of the index fund. Some $175 billion was yanked from actively managed funds, while $326 billion was stashed in passive ones. This shift came about in large part because of the ideas of investment consultant and author Charles Ellis—whose new book, The Index Revolution, sums up the case he’s been making for decades.

Back in 1975, Ellis wrote an article arguing that investors would come out ahead by simply avoiding mistakes rather than seeking to beat the market. Forty years of data have proved him to be prophetic.

Central to Ellis’s case is the huge impact of investment costs. “It’s easy to ignore a 1% fee if you’re earning 15% returns,” says Ellis. “But today you’re lucky to get 7%, which means a 1% fee takes nearly 15% of your returns.” In today’s world of low returns, that’s a message that has never been more urgent.

Battled the pay gap.

The gender wage gap remains stubbornly persistent. But in 2016 two lawmakers made tangible progress in the slow-going battle to ensure equal pay for equal work.

The first is Massachusetts State Sen. Pat Jehlen, who pushed a comprehensive equal pay law through the commonwealth’s legislature this summer. The law includes incentives for businesses to tackle gender pay imbalances and clear standards for making sure workers get “comparable pay for comparable work.” as state law has long required. But perhaps most important, the law bars Massachusetts employers from asking for an applicant’s salary history before extending a job offer. Advocates believe that prohibition will break the cycle by which one discriminatory wage leads inevitably to the next.

Several states are modeling their own bills on the law, and New York City implemented a similar rule for city agencies in November. And on a national level it inspired the legendary congresswoman and equal rights leader Eleanor Holmes Norton to introduce the federal Pay Equity for All Act in the U.S. Congress in September. If passed, it would bar employers from asking about previous salaries nationwide.

Beat back Big Pharma.

Outraged parents unleashed their fury on pharmaceutical maker Mylan this year for “unconscionable price gouging” on a product that their children literally could die without—leading to a congressional hearing, $500 million in penalties, and annual savings in the thousands.

Mylan owns the EpiPen, a device that wards off life-threatening anaphylactic shock during allergic reactions. Families tend to restock EpiPens, which expire annually, during back-to-school season. It was then that many realized that their high-deductible insurance plans left them on the hook for the full retail price—over $600 per pack, up from less than $100 when Mylan acquired the product in 2007. Families need multiple packs (one each for school, home, and to carry around), so bills hit the thousands.

Parents swarmed Mylan’s Facebook page, assailing the price increases, and wrote to politicians demanding action. Hundreds of thousands signed online petitions pleading for sensible pricing; allergy advocacy blogs were filled with heartbreaking personal stories. Months of bad publicity prodded Mylan into releasing coupons for bigger EpiPen discounts and launching a cheaper generic version. The uproar also led to federal probes, revealing Mylan has overcharged the Pentagon and Medicare for EpiPens to the tune of $500 million.

Tackled college debt.

Starting this fall, the Purdue Research Foundation is paying tuition for more than 100 students—who, in return, agree to pay a portion of their future earnings. It’s the biggest program of its kind in the country.

Purdue president Mitch Daniels, a two-term Republican governor of Indiana who joined the school in 2013, based his Back-a-Boiler program on an idea for income-share agreements (ISAs) proposed by economist Milton Friedman in 1955. But he’s been careful to avoid some pitfalls that sank previous ISAs; for example, he limits the term to nine years, so students aren’t doomed to a lifetime of payments.

The experiment is winning bipartisan praise from education experts. And ISAs are just part of Daniels’ strategy at Purdue. He also cut room and board prices and froze tuition for in-state residents for the past three years.

So many people applied for a Sapphire Reserve card within days of its August launch that Chase literally ran out of the metallic card blanks and had to send temporary plastic ones instead.

Why the stampede? The rewards are far better than any other card: three points per dollar spent on restaurants and travel, one point on everything else, and a 100,000-point sign-up bonus if users spend $4,000 within three months. Even the hefty $450 annual fee is mitigated by $300 worth of credits.

But perks only partly explain the card’s blockbuster appeal: Customers flooded social media with “unboxing” videos of opening their cards for the first time. Hoping to inspire similar passion, Citi and AmEx boosted their sign-up bonuses and point structures. The Reward Wars rage on.

So-called robo-advisors—algorithms that pick investments based on your financial goals and risk tolerance—are all the rage, providing new competition for traditional (that is, human) financial planners.

Fund giant Vanguard has steered a middle path. Its Personal Advisor Services—open to investors with $50,000—pairs computer-driven investing with an advisor you talk to over the phone. It grew into a juggernaut in 2016, reaching $46 billion in assets under management. It’s not hard to see why. At 0.3% of assets per year, fees are competitive with fully automated options.

“Now someone with less than $100,000 can get the advice someone with millions would have gotten in the past,” says financial blogger and money manager Wesley Gray.

New state-level tax-advantaged savings plans aim to fix a longstanding problem: that disabled Americans are more likely to live in poverty and less likely to save for retirement than others.

The programs, new in 2016 but made possible by the 2014 ABLE Act, allow anyone diagnosed with a disability before age 26 to save up to $14,000 a year without losing out on Medicaid and Supplemental Security Income benefits. Michigan, Nebraska, Ohio, and Tennessee offer plans that are available nationally.

Here’s one fund company’s marketing ploy we can get behind: In October, ETF giant BlackRock slashed fees on 15 of its most popular funds, including iShares Core S&P 500, from 0.07% to 0.04%. Less than a week later, Schwab responded by slashing fees on five of its own ETFs, including one of its core bond options.

Fidelity and Vanguard have also attracted attention with their own cuts, announced in June and December 2015. The fee cuts won’t save investors a ton of money; and of course, fund companies love the free publicity they’re getting for it. But investors are coming out winners in the long run, says Tom Roseen, head of research services at fund analyst Lipper: “It puts pressure on the whole industry to keep costs in check.”

The five-year-old Consumer Financial Protection Bureau hit its stride in 2016. Among the actions taken this year:

In May, it proposed rules to limit mandatory arbitration clauses—contractual fine print that financial firms use to deprive disgruntled (and even defrauded) customers of their day in court. In June, it proposed rules to keep payday lenders—who make short-term loans at sky-high interest rates—from lending "without reasonably determining that the consumer has the ability to repay."

In July, it proposed rules to limit how often debt collectors can contact consumers—and require them to get the details right. In September, it launched a massive enforcement action against Wells Fargo, which paid $100 million for opening some 2 million accounts without customer knowledge. And in October, the CFPB finalized rules that extend credit card protections to prepaid cards and payment apps like Venmo.

Before John Oliver launched his Sunday night mock news show, Last Week Tonight With John Oliver, nobody ever tried to spin comedic gold out of complicated subjects critical to Americans' financial health. During the show's first two seasons, Oliver had already managed to cover the wage gap, predatory lending, and paid family leave. But he doubled down on personal finance in 2016, devoting entire shows to credit reports, debt collection, retirement planning, and auto lending.

His team's extensively reported deep dives—complete with detailed explanations, investigative reporting, exhortations for viewers to take action, and even practical advice—make Oliver the Money Champion of the Year 2016.