The IMA has warned compensation levels are rising in the investment arena and the industry will be in trouble if it continues to allow or encourage unattainable client expectations.
Speaking at the IMA’s AGM dinner last night, chairman Robert Jenkins reminded the audience of the fact “it is not our money”.
He says while it is too soon to call an end to the troubles of the last year, it not too early to draw a few lessons.
“Compensation levels are rising in our industry. Whether this is good or bad is for shareholders and moral philosophers to address,” he says.
“But if as an industry we allow, much less encourage client expectations which are likely to exceed our ability to deliver, there will be trouble.
“The politics of envy have befallen both the private equity and hedge fund industries. We will not escape.”
Jenkins, who is 12 months through his two year tenure, says the reminder would also come in handy for the industry’s product developers.
“For reasons we all understand they have a tendency to launch the fashionable product at, or near the height of fashion. Thus did dot com fund launches boom just before that boom went boom,” he says.
“More recently property fund launches were rolled out just in time to meet both peak demand and the market peak.
“Thus do we all lose our heads at the top and our nerve at the bottom?”
Jenkins also took a swipe at the use of assets under management as the “meaningful descriptors” of our industry.
“Why do we define ourselves this way,” he says. “What about portfolio performance, revenue, monies spent, people employed, market capitalisation achieved, return on equity generated, charity donations made?”IFAonline
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