The most prescient part of this post is the necessity of managers to redefine their mission. In light of the volatility of the past 10 years, I imagine managers will begin trying to better educate their clients about risk-adjusted returns, making the argument that while they may not beat their benchmark consistently, they provide returns at a lower risk profile. Still though, this is a shift in marketing, not compensation structure.

Can managers successfully train clients to believe the the fees they pay are for volatility management, not sustained out-performance?