“Sir, As chancellor of the exchequer, George Osborne would extol the virtues of fair pay while decrying those who received something for nothing. Would Mr Osborne explain, please, how he and Blackrock determined that £650,000 a year for a day’s work per week constitutes “fair pay” ?
“On the surface it may look as if Mr Osborne is receiving a chunk of money for nothing. No doubt, the pay is based in part on something, namely the contacts and privileged knowledge that Mr Osborne can bring; but they were acquired when he was chancellor paid by the taxpayer. So, should he be free to profit further from them ?”
- Letter to the Financial Times from Mr Peter Cave, London W1, 11 March 2017.
Of course Blackrock, as a listed business with assets under management of $5.1 trillion, is free to do what it likes with its money. Vanguard, which in the US at least is run as a not-for-profit business, has to operate with the constraints that come with being one of the lowest-cost fund providers. But that has not prevented Vanguard from attracting over $4 trillion by way of assets itself, and the company is said to have seen more inflows in 2016 than the rest of the asset management industry combined. Compared to these two firms, the newly created ‘Staberdeen’ (Standard Life and Aberdeen Asset Management), with its £660 billion of assets, looks like a tiddler.
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