Time is money. Annual income targets lead to inferior outcomes
Rudi Minbatiwala | First Sentier Investors | 19 February 2020 | 0.50 CE
It is a natural human instinct to prioritise immediate needs over longer dated requirements. We humans set targets to keep on track, a benchmark by which to measure our progress. However, the trade-off for better alignment is that targets anchor people to a fixed objective and a corresponding fixed time frame. The immediacy of a client’s income needs creates numerous challenges for investment manager – not least that a fixed point of reference, in the context of investment risks and uncertainties, can induce biases in approaches to meet client o...
