It seems IBM* has published a report saying that the fund management industry destroys value to the tune of about 2% of global GDP. The report is super critical on SS ER, Credit rating agencies and FoF. (Not sure why it brackets SS and CRA under Funds Management). Does any one have further information on this? It is mentioned in Financial Times. *Also, wondering how IBM(sic) came about making such conclusions.
they’re saving the waste is going to fees and pumping stocks i guess they’re saying the financial industry could run itself if given the chance http://www.ft.com/cms/s/0/3adcb3e6-5c9c-11e0-ab7c-00144feab49a.html#axzz1IYZWNzxd
…Amin Rajan, said much of the value destruction was caused by the “behavioural biases” of investors. level III all the way
Yea, well they’re destroying Jeopardy - call it even.
LPoulin133 Wrote: ------------------------------------------------------- > Yea, well they’re destroying Jeopardy - call it > even. Lol…I am sure its the evil Watson giving these crazy ideas.
cfa_bombay Wrote: ------------------------------------------------------- > *Also, wondering how IBM(sic) came about making > such conclusions. IBM hires interesting characters such as former AFer phillip.platt.
Inner Evil Voice Wrote: ------------------------------------------------------- > cfa_bombay Wrote: > -------------------------------------------------- > ----- > > *Also, wondering how IBM(sic) came about making > > such conclusions. > > IBM hires interesting characters such as former > AFer phillip.platt. What is the background on phillip.platt? I have heard him mentioned multiple times. Is he an AF hall of famer?
AF Hall of Infamy more like it. The dude was seriously wacko.
The report was also damning to future employment prospects in certain segments of the industry, with sell side research they suggest/predict a 42% (dont tie me to this figure)headcount reduction, and credit ratings also taking a big hit, in the 30 - 40% range. That all sounds a bit harsh to me. I think the general gist was that everyone is overpaid, and the fee’s that some certain types of funds charge dont justify the returns acheived.
Oh… that was a pretty crap article. Funny that FT chose to write on the basis of “unpublished and draft” report. Wonder what IBM’s clients in BFSI sector have to say about this report. I guess their first step will be to start looking at the insane IT budgets.
Maybe IBM should do a study on how much value is destroyed in the financial market consulting industry.
cfa_bombay Wrote: ------------------------------------------------------- > Oh… that was a pretty crap article. Funny that > FT chose to write on the basis of “unpublished and > draft” report. > > Wonder what IBM’s clients in BFSI sector have to > say about this report. I guess their first step > will be to start looking at the insane IT budgets. With the technical advancements in finance thanks to IT, they should be able to get rid of a lot of the excess fat and waste in the sector.