Mercer says managers should pay to run clients' money

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Mercer, an influential provider of advice for pension schemes, has said asset managers should pay investors to run their portfolios and provide performance guarantees instead of earning fees regardless of the returns.

This is according to the Financial Times, whose report (paywall) can be found here.

So investors are no longer alone in believing the current system prioritises profits for asset managers over their clients' interests. Now, at last, someone in the industry has highlighted the trust issue and indicated that asset managers are not incentivised to improve corporate performance.

Long-standing UKSA members may recall Martin White's 2009 paper positing an Active Management Partnership to promote a long-term view of performance and the associated incentives.

Martin also included these ideas in his response to the European Commission's Green Paper on the EU corporate governance framework in 2011.