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Index giants are extracting fees that exceed the value of the service they provide, purely because they can

Opinion

EY’s annual Exchange Traded Funds (ETF) Roadshow kicked off this morning with a breakfast briefing in Dublin. As part of the event, EY partner Paul Traynor spoke with Gareth Parker, Chief Indexing Officer & Chairman of Moorgate Benchmarks. According to Parker, innovation is poorly served by the existing index providers, who prefer clients to “do things their way” rather than foster those innovators. He commented: “Index giants are extracting fees that exceed the value of the service they provide, purely because they can”. Parker also suggested the brand value in index providers will decline significantly over the coming five years, seeing a future where every investor – not just large asset owners but every investor – has his or her own customised indices, implemented primarily via ETFs.

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