Europe Needs a Revolution in Investment Fund Fees
Regulators need to step in to safeguard the retirement savings of EU investors from the ravages of too-high fees.
Jam tomorrow.
Photographer: Andrew Harrer/Bloomberg
In business, Adam Smith’s invisible hand often does the job of aligning the supply of and demand for financial products to the benefit of both buyers and sellers. Sometimes, though, imbalances develop that require the heavy hand of the authorities to re-calibrate the scales. Europe’s investment industry is a market sorely in need of intervention.
The European Securities Market Association has just published a 117-page report analyzing the performance and costs of retail products in the European Union. It makes for depressing reading — all the more so given the increasing need for the region’s aging population to put aside sufficient retirement funds to ensure a decent standard of living in its twilight years.