From now on, it is worth considering an interesting fact when choosing a bank professional: fund managers from more modest families produce better returns. An American-Australian analysis may be helpful in realizing our savings.
They vote for the children of rich families in the banking industry
A study commissioned by the National Bureau of Economic Research in Washington, DC , assessed the life and performance of portfolio managers in both Australia and America.
Although we would expect – and in fact we think “instinctively” – that professionals from richer families bring ‘von haus aus’ home from school, financial sense and therefore more reliable, the exact opposite is true.
The analysis was quite extensive
Covering the entire career of 267 professionally recognized portfolio managers , who together managed nearly 500 investment funds. The young American and Australian fund managers that are currently operating have not yet been informed of their family background and education, so the analysis is more likely to apply to the older generation.
It has been proven that disadvantaged professionals work harder and drive better. Despite the fact that the future of the most renowned business schools is more welcomed by financial institutions, as well as abroad, just as in Hungary, the study shows that expensive and reputable universities do not in fact guarantee that those who graduate from them will achieve high returns.
Out of the richest fifth of those tested, those who belonged to the poorest fifth did better – and therefore did not lead them straight to an elite university.
Small asset management companies are getting better
The investigation has generated huge repercussions in the professional circles because in the banking sector, traditionally, trust is trusted by fund management professionals from a good family with a strong relationship capital. They also like to let key clients know who they are dealing with. However, the real benefit does not come from the client.
So if we were to entrust our portfolio to a specialist, we would not believe what kind of “pedigger” you have.
Another highlight of the analysis was that small asset management companies employing less-trained staff often achieve better results than big-name competition. The lesser-known financial institutions have to prove with great results that they have a place in the market and that it is worth entrusting them with our assets.