The Great Investment Industry Roll-Up
Gradually, its inefficiencies are being competed away.
The U.S. investment business resembles the video-rental marketplace during Blockbuster’s early days. It is scattered, diffuse, inefficient--but with the hint of something better on the horizon.
Rather than pool their resources, thousands of institutional pension funds and endowments operate separately, each paying for their investment decisions. Half a million companies offer 401(k) plans, each different from the next (or at least, obtained through a separate negotiation). Tens of thousands of financial advisors select investments for their clients, choosing from myriad money managers.