Economies of scale appear to not apply to the asset management industry.
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Vanguard's and Schwab's economies of scale would beg to differ? :)
@BoomerandEcho@WSJ -
I would have guessed that total industry fees would be significantly lower because of
@Vanguard_Group’s size and scale, but that chart proves otherwise. -
Their data is way way broader than just buying mutual funds and ETFs. That's also the retail banking system, capital markets investment banking transactions, and many others. Can't draw conclusions about asset management alone from that chart.
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CORRECTION: Economies of scale appear to not apply to the financial services industry.
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Similarly, clients today get WAY more than they did 25/50/75/100 years for that same ~1.5% to 2% aggregate cost. Economies of scale drive down costs; firms simply use the efficiencies to add MORE value elsewhere to justify and maintain the same pricing power.
End of conversation
New conversation -
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, f*¢.,cvv
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