Imagine you are happy with making 3% after inflation. You give your money to a wealth manager and they deliver on your goal. Does it matter to you if they make 5% on your money and then they pay you 3% + inflation and keep what’s left? What if they make 7% or 10% or even 15%. You still make 3% + inflation and they keep what’s left. Is there a point when you think, actually that’s not fair? If there is a point, what is it? At what point do you say, I want a better deal?
Yes, my point is theoretical because its hard to really define gross returns because they are intermingled with costs. It is not simple to unmingle.
You could take the view, I really don’t care what the wealth managers make, as long as I make 3% + inflation. You could approach it that way, but what happens when they lose money? Is it still fair? What happens if they take on more risk than they need to? And if they did, they are always the winner. That certainly would never be fair.
You simply can’t ignore what you pay for financial intermediation and what you get for taking the risk. If you do, you’ll end up paying more than you should.
It maybe time for you to choose an Investment Audit.