You NEED Alternative Investments... or so I'm told. Part IV - Understanding Performance Fees.

This is the fourth installment of a series on Alternative Investments.
I initially posed the question – are Alternative Investments good for clients, or are they good for me as an advisor to market myself?
Costs matter in investing – all things being equal, the lower the investment costs, the higher the return for the end investor.
Ever heard the term ‘what you can’t fix, you feature?’ it means turning a problem or imperfection into a positive aspect, often by highlighting it or making it a defining characteristic.
The old real estate joke: “the house isn’t small, it’s cozy” comes to mind.
Performance fees are costly to investors, yet somehow sold as a feature.
Let’s dive in and understand how they work.
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