Investment Industry: How to Win the Loser’s Game [Part X]


We’ve explained how ordinary investors can win the loser’s game. But what about the bigger picture? In the tenth and final video in this series, we explore how the investment industry needs to change if it’s to serve investors better and make a more valuable contribution to the economy and to wider society.

See Part IX here.

Investment Industry: How to Win the Loser’s Game

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Transcript

The investment industry has become a key component of the global economy. Here in Scotland, for example, hundreds of fund managers, brokers, advisory firms and consultants have concentrated around Edinburgh, now Europe’s fourth largest financial centre.

Yes, the sector does make a key contribution to economic wealth and tax revenues. But, as we’ve seen, it also takes a great deal from ordinary investors through the charges it levies. So, has the investment industry just got too big for our own good?

Merryn Somerset Webb from MoneyWeek says: “The fund management industry needs huge reform – of course it does. There are way too many funds, there’s too much attempting to produce difference out of nothing. This is a huge problem in the financial industry. If you want to sell things you need to differentiate yourself from the next guy along. But in fact investing is remarkably simple – not necessarily easy, but simple, straightforward. It doesn’t need so many different products, it doesn’t need so much differentiation, it doesn’t need quite so many people, and it doesn’t need to be so expensive.”

See full via sensibleinvesting.tv