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Fees on returns instead of assets is also a bad idea. The investment manager doesn't have a downside when he loses the customer's money, but makes money when th
by gizmo 11y ago
Fees on returns instead of assets is also a bad idea. The investment manager doesn't have a downside when he loses the customer's money, but makes money when the returns are good. We've seen time and time again (on wall street especially) that incentives like these result in utterly reckless behavior.
- whatok 11y agoNot necessarily a common thing in practice but: https://en.wikipedia.org/wiki/Hurdle_rate https://en.wikipedia.org/wiki/Hurdle_rate