Friends and clients of our firm know that we’ve been singing the same evidence-based refrain for many years, so it is a pleasure to see when the major financial media joins in our song. In the Sunday, August 22nd issue of The Wall Street Journal, Jason Zweig concludes that the old-fashioned, active fund manager is dead. Anyone with that job description is best served looking for new employment.

Jason bases his piece on a recent submission by Charles Ellis to the Financial Analysts Journal, The Rise and Fall of Performance Investing (subscription required). Here’s an excerpt from the summary of Ellis’ article:

As acceptance of indexing grows, clients and managers have an opportunity to stop focusing on price discovery (which has made our markets so efficient) and refocus on values discovery, whereby investment professionals can help investors achieve good performance by structuring an appropriate, long-term investment program and staying with it.

So where will the active managers land next? Today, there are only a few hundred thousand financial advisors for tens of millions of investors. Ellis asks, “Who better to fill the insatiable demand for financial advisers than former portfolio managers who know firsthand how hard it is to beat the market?”

Click here to read Jason Zweig’s WSJ piece (subscription required).