Nice article. This is arguably THE number one responsibility/governance issue facing active fund managers. And it’s fascinating because of the linkages.

Why do active managers waste so much client money on dysfunctional sell side & credit rating agency research Dysfunctional because it a) costs so much, IBM is said to estimate this around $460bn http://www.ft.com/cms/s/0/3adcb3e6-5c9c-11e0-ab7c-00144feab49a.html#axz… But also because b) it misses so many ESG/intangible aspects of corporate performance? Think health & safety in O&G, governance & risk in finance… the list is huge.

Why are they so against any action on the FTT – see this paper from Dutch investors http://www.eumedion.nl/en/public/knowledgenetwork/position-papers/posit… - when hyper-volatility and HFT is one reason why traditional active fund manager are so unable to show value for money?

Why is the financial industry which is so good at fostering dramatic change on other sectors and itself when it wants to (eg London's Big Bang) so addicted to talking and talking and talking and talking about the same ‘ol problem (relative return benchmarks, cap weighted indices etc) ad infinitum?

But the comment that most got my attention was the view that investment management fees are not “almost nothing". It reminded me how many investment managers still explain their disinterest in CEO pay on the same grounds.

I wonder if there might be a link between these mindsets?!

To my mind, this shows that if asset owners want to see a less dysfunctional, less hyper volatile market, then a good place to start is with the fees they choose to pay. I congratulate CFA Institute on this article and look forward to follow on articles on fees for hedge funds and private equity too.