Financial Middlemen Can Cost Up To 6% Annually
Bloomberg has put together an interesting interactive presentation on the layers of costs often assumed by stock market investors. Writes Bloomberg:
Beware the costs of financial middlemen. You may think you're only paying 0.5% to 2% to have other people manage your money, but the multiple layers of financial intermediation that is so prevalent in today's investing world – with one money manager subcontracting to another – can lead to as much as 6% in non-performance-related fees being assessed along the way. What's worse is that this proliferation of the middlemen has been accompanied by rising CEO pay but often lukewarm returns for shareholders -- the ultimate owners of the companies.