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Money Managers Need to Upgrade Their Image
By: Cindy Wendland
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The latest Money report from TIME magazine offered a market overview on how to invest and make money. They say that respected investors, such as CalPERS, who manages a $300B pension fund, are shifting money into passive investments. Simply put, the index funds run by robots are outperforming mutual funds managed by Ivy League M.B.A.s.

In the world of finance, it is a long-argued discussion over which option produces higher returns — passive investing (index funds run by robots) or active investing (funds managed by money managers). This article, “Do Nothing, Make Money,” advocates passive investing. One of the biggest downsides to active investing is the high cost of the fees for managing the funds.

Money managers need a makeover, or they need to find a way to show more value with less cost. Their problem is a sign of the times with innovative technology. When people understand the true cost of management fees, they won’t want to continue to use active investing. How will money managers continue to stay relevant and valuable? They have a marketing problem.

Gregg S. Fisher at Gersteinfisher.com says, “Investors expend much energy searching for low-cost funds and trying to decide between an active and passive fund strategy in building a portfolio.” If you take the advice of the big guys, it’s not worth your time searching. Instead, money managers may need to reinvent themselves.


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About the Author
Cindy Wendland has a background in marketing and finance. She is the creative director for an online men's health magazine, BrainBrawnBody.com, and she gets to write their leisure/travel blog. She is also a web designer helping her clients with online community engagement, websitesbywendland.com. Prior to her web years, she worked in pharmacy consulting.
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