Contrarian: Brrr... indexing succumbs to chill winds

CONTRARIAN

All investment bankers and, arguably, most fund managers, are still woefully overpaid, but the rest of the financial services industry is beginning to feel a collective chill when it comes to costs.

Through measures such as RDR, regulators are slowly but steadily chipping away at all those hidden costs while, on another flank, passive fund managers are placing increasing pressure on margins via their low cost structures. Suddenly all those ‘small extras’ that used to eat into the final cost of ownership are coming under fierce scrutiny. Take the index providers, for many years a cosy little group consisting of FTSE, S&P, Dow Jones and MSCI, which has managed to build up global business empires by running quantitative data services that power well known indices such as the FTSE 100. ...