John C. Bogle, founder of The Vanguard Group of Valley Forge, Pa., recently warned the mutual fund industry that it will lose its cherished spot in the hearts of long-term investors if it doesn't become more accountable to shareholders.

Bogle was speaking at a recent forum in New York of the Financial Planning Association of Atlanta. Bogle told a ballroom of financial advisers that investors have more to blame than themselves. Bogle said fund managers played a role in the stock market's unrealistic buildup and subsequent implosion because they "uncritically accepted the hyped-up growth projections for technology, medical and telecommunication stocks, and piled them into the funds they manage[d]."

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