The asset management industry frequently complains about the fact that they face more and more regulation, that they are under pressure from passive managers and clients and that technological progress increases competition. One would start to wonder if there are any perks to the job at all.
What they deliberately fail to mention are the increasing inflows of money and the record profits they are making. Although these don’t rise as fast as assets do, which results in declining margins, some say that margins are still a staggering 30%. Counting on "blindfolded" consumers that do not have a clear view on market rates, funds ultimately benefit from the lack of transparency to make money from them. In the UK, for instance, pension funds usually sign non-disclosure agreements, while Calpers, a US pension fund, doesn’t know what amount it paid in fees to private equity firms.
"One of the prerequisites of a competitive market is full information, something that is singularly lacking in many corners of the industry", says Sophie Grene. And BETTER FINANCE could not agree more.
Full text here: The Financial Times