AES International

The traditional financial industry measures returns, assets and fees. Some of the most
expensive outcomes in a client’s financial life don’t show up in any of them. In its Mind the Gap study, Morningstar compares the returns funds produce with the
returns investors actually receive. Over the ten years to the end of 2025, the average
dollar invested in US mutual funds and ETFs earned 8.7% a year, against 9.9% for the
funds’ aggregate annual total return. That gap of around 1.2 percentage points a year is
about 12% of the total return.
The difference comes from investor behaviour – the decisions people make about when
to invest, when to withdraw and how much to commit. These decisions, often influenced
by emotions, market conditions and behavioural biases, can mean investors capture less
of the return their investments actually deliver.

Commission-led advice survived for decades because clients couldn’t see how it worked. That’s changing quickly, and clients are now asking a question some firms will find hard to answer.
A few years ago, an executive leader or business owner might ask about performance, or what we’d do differently with their portfolio. Now they arrive having run their existing arrangements through an AI assistant, often more than once, and they ask something much sharper: who else gets paid when I follow your advice?
That question used to take years of disappointment to reach. Now it takes an evening. For an industry that has relied on complexity to keep its economics out of view, that’s a significant shift, and I don’t think many firms have fully absorbed what it means.

Something has changed in the first meetings I hold with new clients, and it happened fast. 
Two years ago, a senior executive or business owner would arrive with questions. Where should the pension sit if we move again? What does an exit mean for the family’s tax position? Increasingly, they arrive with answers. A product name, a structure, sometimes a full strategy, assembled over several evenings with an AI assistant. 
I understand why. These tools are remarkable. They explain complex financial mechanisms clearly, at any depth, at any hour, for nothing. In twenty years of advising international families, I’ve never seen clients arrive so well informed, and I mean that as a genuine compliment to them and the technology. 
But something important is getting lost in the translation from information to decision, and it’s worth talking about.