Financial advice consolidation in the UK has put private equity in control of hundreds of firms. Here's what vertical integration and hidden conflicts mean for your money.
The fund industry says index concentration is the big risk. But the evidence points elsewhere. Compressed expected returns are what really threaten your long-term wealth — and the right response is simpler and cheaper than the industry would have you believe.
The S&P 500's concentration in the Magnificent Seven has critics worried about indexing risk. But Hendrik Bessembinder's research reveals why index concentration actually strengthens the case for passive investing: just 4% of stocks drive all market returns, and active managers consistently miss these winners. Historical data shows market concentration has been normal for 150 years, from railroads to tech giants.
Robin Powell
Sep 9, 20258 min read
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