Lax Oversight Destroys $300 Billion for Hedge Fund Investors YTD 2020

During coronacrisis, inadequate proactive investment monitoring, weak tactical calls with redemption restrictions, lockups, and LP inertia responsible for U/HNW and institutional LP investor wealth destruction. Confusing routine GP reporting, with LP fiduciary responsibility for active monitoring, exacerbates losses.

HF Monitoring

 

Financial Adviser Served Segment to Shift to Self-Directed

Financial planning fees linked to size of account no longer tenable proposition and move to flat fee imminent. Blended human and digital channels have delivered less worse performance than human financial advisers. Online collaborative financial advice and execution to dis-intermediate traditional channels initially, and progressively also full-service wealth management firms. Behavioral changes and learnt attitudinal shifts during coronacrisis to increase self directness, reduce role of financial adviser, and drive online remote interactions more akin to face-to-face exchanges.

3-fa shift to self directed

Wealth Management Industry Destroys $2.4 Trillion Retail Wealth YTD, April 2020 with $400 Billion Dead-weight Loss

300,000 financial advisers in captive, independent, RIA  and private bank channels destroy retail client wealth through incompetent strategic asset allocation, wrong tactical calls and bad manager selection. Hug markets passively and continue to charge $260 bn fees.

2 value destruction

$130 bn Strategic Asset Allocation Inefficiency Dead-weight Cost

Why do RIAs / financial advisers, private banks, wealth management firms not remove dead-weight costs of $130 billion just alone from strategic asset allocation inefficiency?

And pass those to their clients, making everyone better off. That’s what Nash equilibrium would suggest. Yet they don’t.

A reason,  among many is a slippery slope. This opens the Pandora box of $260-$300 billion being paid in advisory fees.

ActiveAllocator changes all this in 10 clicks and 10 minutes, at a tenth of cost.