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There are advantages to managing one's own investments: low management fees, transparency, focus on the long-term, and a lack of the restrictions shackling institutional money managers.

The advantages are clear. So are the disadvantages. Every reader, no matter how savvy, knows that almost all Israelis will continue to invest through insurance companies, pension funds, provident funds and mutual funds, even though the strongest argument for managing one's money oneself boils down to fees.

The simplest example screams out. An investor who deposited NIS 1 million with an investments manager who charges 2.5% of the assets a year and achieves inflation-adjusted returns of 7% a year (before fees) will, after 15 years, have made NIS 968,000. His investment manager will have made NIS 600,000.

An investor who manages to lower the fees whether by self-management or some other means) from 2.5% to 1% a year will, with annual returns of 7%, increase the value of his portfolio to NIS 2.4 million in 15 years, meaning he'll have made NIS 1.4 million.

Because of the sharp fluctuations in portfolio value, most investors don't realize the impact of the fees they pay. Only if you examine your portfolio over time will you realize how much of your pension they're eating up, and what you'll be left with when you're ejected from the workforce.

Currently the bodies charging the highest fees for long-term savings are the Israeli insurance companies, through policies they call "executive insurance" (bituach minahalim) or "profit-sharing policies." Both names are misnomers. These are policies characterized mainly by high fees and low returns.

The management fees that the insurance companies charge are high mainly because the insurance supervisors have failed to allow real competition to arise. They have failed to enable long-term savers to withdraw their money quickly without paying prohibitive fines to the insurance companies.

Theoretically, the high management fees should allow the insurance companies to invest large sums of money in investment management, service, and protecting the interests of their clients. Yet unsurprisingly, it turns out that insurance companies are generally the worst in these parameters.

The affair of the Africa Israel debt negotiations drives home the point.

Africa Israel, which is controlled by Lev Leviev, announced in late August that it can't repay its debts to Israel's pension savers in full. It owes them NIS 7.5 billion. It borrowed the money by issuing bonds to the clients of the insurance companies, provident funds and pension funds.

Unlike many companies that stumble, at Africa Israel the main problem is overleverage. It borrowed tremendous amounts and invested the money in real estate during the global capital market boom. Therefore, any change in the equity structure of the company, meaning, conversion of part of the debt into Africa Israel shares, could enable the company to soldier on and possibly flourish.

The liquidity crunch at Africa Israel sent the prices of its bonds spiraling down, causing savers heavy losses on paper. But it also created an opportunity for investment managers at the insurance companies, pension funds and provident funds that hold our money to improve their clients' position.

These investment managers, called "institutional investors," are flush with liquidity, power - and management fees. The biggest manage tens of billions of shekels worth of assets and take in deposits worth billions more each year.

The "institutional investors," or - their real name - the "people who manage other people's money" could harness all these resources to arrange a terrific deal for their clients. Their clients could receive most or all of Africa Israel's shares. When Africa Israel's business recovers, the clients would make great profits that would compensate them in part or in full for the losses they suffered when the price of Africa Israel's bonds collapsed during the last year.

And the issue at stake isn't confined to Africa Israel. The type of reorganization that the institutional investors wind up demanding at Africa Israel, and the proportion of stock they receive, will affect the entire structure of Israel's capital market in the years to come. Africa Israel could be the precedent that reshapes the market: millions of little savers could have most of the rights that now belong to a small clique of people who control the big companies; or the risk could stay with the public, while the profits go to those company owners and their managers.

Even though the scope of the debt arrangement is unprecedented in sheer scope, the managers of the insurance companies, provident funds and pension funds have been struck dumb in the last couple of months. Not only have they avoided stating just how they mean to protect their clients' money; some of them turned it into an ideology and said that discussions about the debt arrangement should be conducted behind closed doors.

That is a very strange attitude. If these investment managers were loyal to their clients, they should be clearly and publicly stating how they mean to protect them.

Publicity and transparency are especially important precisely because Africa Israel could set a precedent for future debt arrangements.

The managers of "other people's money," who charge us through the nose for their management, should explain to their clients - and to the capital market as a whole - that they are determined to protect the people who deposited their money with them.

The more these "managers of other people's money" stay mum, the more gnawing the fear. That is, the fear that these "managers of other people's money" care more about their careers and contacts with the clique of oligarchs than about protecting you.

Given that that is a possibility, at least for some of the institutional investors, one must wonder why the capital market regulators are keeping silent. Yes, that means Yadin Antebi, the commissioner of capital markets, savings and insurance and Israel Securities Authority chairman Zohar Goshen.

They must be well aware that certain "managers of other people's money" are trapped in conflicts of interest, making it hard for them to act on their clients' behalf. Therefore, they should remember their true duty.

Goshen and Antebi shouldn't settle for talk. They should enact laws and hand down rules that enable professional managers at the companies that manage other people's money to divorce themselves from alien considerations, and focus on protecting their clients' money.

Goshen and Antebi are two very sharp regulators indeed. One is a lawyer, the other an accountant. Both understand that failing to protect savers' money in the Africa Israel debt arrangement could burst a dam, washing away tens of billions of shekels worth of pension savings in the space of a few years.

We are at the end of 2009. Everybody knows that if the market is left entirely to the whim of capitalists, we will be sorry. Wealth will pass from the many to the few as the market stumbles from crisis to crisis.

This is the time for the regulators and for the managers of other people's money to speak loud and clear, for the sake of the pensions of the millions of people who don't belong to the clique.