Figures Don’t Always Tell the Whole Story
Good news from investment consultancy bfinance - the ‘turbulent twenties’ are bringing a new wave of price reductions in active asset management.
The headline figures include a 13% drop in global emerging market equity management fees since 2022, a 12% reduction in European high-yield credit management fees over the same period and a 14% reduction in impact equity management fees.
In certain asset classes, the firm now sees what it calls a significant divergence between quoted fees and actual price points available during manager searches. Such divergence might be viewed as temporary but could develop into broader pricing changes over time.
The picture is more nuanced in private markets. Although strategies are under pricing pressure in a softened fundraising climate and after a prolonged period of disappointing distributions, limited partners refer to significant or moderate fee reductions in comparable direct lending strategies. The direction of travel of other expenses, however, is a different matter.
THE MOST DANGEROUS MARKET IN THE WORLD RIGHT NOW IS JAPAN.
— Bull Theory (@BullTheoryio) July 7, 2026
Japan's 10 year and 20 year bond yields just hit 30 year highs.
Both moved to their highest levels in three decades.
The 10 year yield is up 137 basis points over the past 12 months, and up another 9.1 basis points in… pic.twitter.com/ADaBs5BHAE
In fact, for some types of private debt, the percentage of limited partners that noted a fee increase was higher than the percentage who said fees had fallen. Barely one in five reported an improvement in how fund managers’ expense arrangements are structured.
The report authors warn investors to be wary, as while the pendulum of pricing power may have swung towards allocators in certain key areas, not everyone will benefit.
In private markets, for example, the shift is masked - typically appearing in more aggressive discounting practices rather than reductions in stated fees - and strongly favours large, traditional institutional clients over smaller institutions or newer entrants from the wealth sector.
Meanwhile, cost transparency remains problematic in sectors where real fee improvements would make the greatest difference to the bottom line. The report authors argue that ongoing tension between cost-setting and cost-seeking demands continual innovation in benchmarking and governance.
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Always Check Your Sources
The subject of finfluencers has cropped up in this column previously, most recently when we looked at options for establishing the credibility of those claiming to have a unique insight into the world of investment.
But the fact remains that whether social media figures who use platforms like TikTok, Instagram and YouTube to share personal finance information, investment tips or market insights describe themselves as authorised advisers or money coaches, they are the introduction to the world of investing for a growing number of people – particularly those who have grown up in the social media age.
Read more: The UAE Regulated Finfluencers First. Now Comes the Hard Part.
Part of this is also down to how the world of money has changed. For hundreds of years, children were encouraged to put their money into small, sealed containers (called piggy banks after the clay used to make the pots and jars people stored their precious savings in during the Middle Ages).
When they reached a certain age, their parents would take them to a bank where they would open their first account and usually receive a variety of gifts, starting a relationship that, if they were lucky, would eventually see them have a relationship with their bank manager.
Now, of course, money is largely virtual and young people are much more influenced by celebrities who all appear confident, financially successful and don’t have to worry about financial regulations.
In a recent letter to the Financial Times, well-known Norwegian financial influencer Tormod Harbo said that he tried to make finance clearer, more responsible and easier to understand, but that also showed him where the problem is.
He noted that many young people meet markets through social media before they come into contact with serious institutions such as business schools, banks or financial media, and that when good financial education is missing, weak advice has more room to grow.
Harbo said warnings, disclaimers, takedowns and platform rules arrive too late, and a society that expects people to take responsibility for their financial future cannot leave their first lessons about risk to poor online advice.
According to Richard Berry, managing director of the Good Money Guide, it would be insane to ask for finfluencers to be regulated to offer tips (guidance, not advice). As with the under-16 ban on social media, he believes the onus should be on the platforms to verify users who offer financial content.
It’s Good to Talk
In the past, the financial services industry was plagued by the image of smooth-talking salesmen persuading gullible consumers to put their money into unsuitable investments.
Regulators and industry bodies have done much to improve the quality of service received by retail and institutional investors. Organisations such as the CFA Institute run a wide range of programmes designed to equip finance professionals with the knowledge they need to develop their careers.
However, new research suggests that soft skills such as communication, collaboration and teamwork are the biggest gap in the skill sets of early-career professionals entering the finance industry.
The CFA Institute’s survey of 500 finance sector professionals in management roles also found that soft skills were considered the skills that make professionals most employable in the finance industry today. Two-thirds of respondents said improved communication was the key to career success.
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To put that figure in context, only half of those who responded to the survey believed that the ability to use AI effectively was the most important attribute for young finance professionals.
When asked about promotions into more senior roles, one-third referred to soft skills as the most important consideration as people move into leadership roles.
Peter Watkins, senior director of university programmes at the CFA Institute, noted that a career in finance is both technical and social, and while analytical ability, numerical fluency and problem-solving are obvious requirements, success depends just as much on the ability to communicate findings clearly and work with clients.
