I've decided to pay a minimum of 2000 every month in SIP,pension and childre plans. Does the amount im investing should be the same through out the yrs or i can increase the level in some month? eg.5000
Feb 28th 2008 From The Economist print edition Investors pay too much to have their money managed
LOOKING after other people's money is a fine business. The asset-management industry long ago managed to secure a deal whereby its fee income rose in line with the markets; it can earn ever more money by doing nothing. The industry oversees some $64 trillion of assets and, at a conservative estimate, its costs in fees, dealing charges, custody and so on are around 1.5-2% a year%u2014so investors are shelling out $1 trillion a year to the custodians of their cash.
As our special report in this issue shows, the industry puts a big chunk of this straight into its back pocket. A survey by Boston Consulting Group found that operating margins of fund-management firms were more than 40%. People like Steve Schwarzman of Blackstone and Ken Griffin of Citadel have become billionaires thanks to the way their private-equity groups and hedge funds look after other people's money.
You would have thought such a business would be an easy target for new entrants; competition would reduce margins and force fees down. But, by and large, this has not happened. A cheap alternative to traditional fund management arose more than 30 years ago, in the form of index-trackers, portfolios that mimic a benchmark such as the S&P 500. Trackers have gained a respectable market share but are much more popular with astute pension funds and insurance companies than with the
