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« An Important Welcome -- and Some Housekeeping | Main | The Financial Commentary 'Peter Principle' »

April 28, 2008


Tim Plaehn

Many years ago I sold investment products. It is a hard way to make an honest living. The products with the highest commissions are usually the least appropriate for many customers. But which way do you think many financial advisors go to make their incomes?

Bill aka NO DooDahs!

One has to try and be true to themselves and their character (or lack of same). Every manager desires to maximize their benefit from AUM, and usually this involves INCREASING AUM.

Those who promote shamelessly (and possibly counter to their actual trading style) and through fearmongering probably value the AUM more than they value intellectual honesty, educating consumers, and providing high returns on capital.

Those who value intellectual honesty, high returns on capital, and education of their consumers will probably not be very good at fearmongering or whoring themselves out to every press opportunity possible, and will therefore probably never get on Kudlow, TechTicker, etc., and will probably have less AUM as a result.

It's not that both groups don't value maximizing the benefit of AUM - they DO - it's just that some are willing to do what others aren't willing to do, and that speaks either to character (from a normative view) or to relative value assigned to competing goals (from a positive view).

Hope that clarifies!


"He is (wisely) going with the flow. We are (perhaps unwisely) trying to educate investors. Hmm."

His goal is to dramatically increase Assets Under Management through inflows (not returns).

What is yours?


Forget all this analytical mumbo jumbo.

Change the name of the site to "No Investor Left Behind," spruce up the home page with Annie Leibovitz celebrity semi-nudes, and give away 'OldProf' ball caps to the first fifty commenters eschewing polysyllables.

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