Folklore of Finance

How Beliefs and Behaviors Sabotage Success in the Investment Management Industry

December 2014

The Center for Applied Research (CAR), an independent think tank, conducts research to provide strategic insights into issues shaping the future of the investment management industry. Our current study, The Folklore of Finance, takes an in-depth look at the standard measure of success for investment professionals — the production of alpha — and why that model must change for the industry to deliver true success.

To better understand the flawed beliefs and behaviors within the industry, what we describe as “folklore,” we examined the views of thousands of investors, investment providers, government officials and regulators across 19 countries over 18 months.

What we learned is that true success lies beyond what the industry previously accepted. It includes not only producing alpha — perhaps more importantly, it also requires helping investors achieve their long-term goals. We’ve outlined concrete steps that the industry must take to develop a new “Folklore of Finance.”

EXPLORE THE FULL REPORT


COUNTRY SNAPSHOTS

Australia                  
           
Brazil           

Canada
 
China

France

Germany

Hong Kong

India

Italy

Japan
 
Netherlands
 
Singapore
 
Switzerland
 
United Arab Emirates            

United Kingdom
 
United States
 

 
 

We learned that true success lies beyond what the industry previously accepted.