Pitfalls of Entrusting Investment to Others

He manages 1 billion, at a 2% fee; he manages 10 billion, also at a 2% fee. Whether he profits or takes a loss, he still earns that same 2%. So why does he care so much about whether the returns are positive or negative? What he should really be focused on is the scale of assets under management. His energy must go toward growing AUM, not chasing higher returns.

ROI is destined to decline as AUM scales up. Moreover, most people face an income ceiling that strictly limits their options and ultimately shapes their decisions.