In the investment world, I’ve heard the argument so many times, ‘we outperform’, so paying more to get more works.’ And the words “You get what you pay for” are often touted.
Patrick Hosking of the Sunday Times said: “There should there be red faces at Schroders over their swanky green offices?”
He says “I’ve visited an awful lot of swanky head office buildings over the years, but few come close to the lavish new office block designed and built for Schroders, the FTSE 100 fund management group, in the City of London. There are the 11 garden terraces spilling down the tiered building, each with its own manicured lawn, plus sundry restaurants, a gym and a gigantic, airy atrium. You could play a very decent game of tennis in that beautiful, uncluttered reception area.”
Most investors with Schroders do not visit their premises. They rely on web sites and advisers. But if you did have the opportunity to visit their premises, would you ever think, ‘I’m paying for all of this excess’
Perhaps you may think ‘I’m paying for the best people to get outperformance, so I don’t mind the swanky offices’
The point of excess swankiness is to promote an image of success. And success must mean outperformance.
If you have your portfolio independently reviewed, that means not a review by your existing advisers, but independent of them, and they confirm outperformance. That’s great news. If they cannot confirm outperformance, you are paying for swanky offices which have no benefit to you whatsoever. You can then choose whether you continue to pay or you find a better alternative.
The alternative is so much better…