The last siren call of investment managers is an appeal to your
ego. This is how it goes:
“Yes, we know most managers fail miserably to outperform the
market after they pay themselves hefty fees, but those guys are for the small
accounts. You have a million dollars!
This will get you access to the next level of managers. The really good ones.”
Or: “Oh, of course, accounts below a million dollars are
better off investing in asset classes, but you have 5 million dollars! We have proprietary research just for
you. Our investments trounce the
market.”
Or: “Well sure, if you only had $5 million it might make
sense to keep expenses low. But you have 10
million dollars! You can pay for our quantitative algorithm that picks
the best stocks based on how loud Jim Cramer yells the ticker symbol.”
Joking aside. The
trend is clear and you can see the allure.
At every wealth level it seems you have just enough to get
you access to the real managers. So how do you know how much you really need
to get the best managers? Maybe
there is a way to find out. Maybe there
is an investor out there so large that they trump every other investor and
truly have access to the very best managers.
And maybe this investor makes their returns public so you can see
exactly how well their access to the “best” managers turned out for them.
