Issue #7

A weekly newsletter dedicated to reimagining investment management.

Author

Scott Treloar — Founder of Noviscient
April 11, 2024

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"If there’s one industry that’s ripe for disruption, it’s surely asset management."

Where shall we start? Let's start with fees because fees drive behaviours.

What would happen if the industry didn't charge fees based on assets under management and instead linked fees to value created for their investors?

  1. Many under-performing funds would close as they don't create investor value

  2. Firms would no longer focus solely on AUM growth

  3. Firms would need to learn what is valuable to investors

  4. Firms would need to become much more efficient

  5. Industry margins would decline to more 'reasonable' levels - that is, not 30-40%

  6. Investors would end up with a lot more wealth (global savings of around $400bn per annum)

This feels like a good start.