Author Topic: Financial Status  (Read 1424 times)


  • Bristles
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Financial Status
« on: April 26, 2015, 06:28:27 AM »
Interesting article:

At a finance conference last year, I learned this: Instead of saving money directly for their own retirement, many workers have their employers save for them. Those employers hire in-house specialists to pick which specialty consulting firms to hire. These consulting firms advice on which investment firms to hire. And those investment firms pick actual productive enterprises in which to invest. All three of these intermediaries, i.e., employer, consultants, and investors, take a cut for their active management.

Even employees who invest for themselves tend to pick at least one high fee intermediary: an active-management investment firm. Few take the low cost option of just directly investing in a low-overhead index fund, as recommended by academics for a half-century.

Iíve given talks at many active-management investment firms over the years. They pay speakers very well. Iíve noticed that (like management consults) they tend to hire very visibly impressive people. They also give big investors a lot of personal quality time, to create personal relationships. Their top people seem better at making investors like them than at picking investments. One math-focused firm said it didnít want more investors because investors all demand more face time and influence over investment choices.