re: How much should I pay a fund manager?

Here is my take on this. Most individual investors are quite emotional. What I mean by this is they sell at the bottom cause they get scared and buy back at the top. That is why investors generally only capture a very small portion of the markets actual return. One can argue passive vs. active management all day long and each could provide valid points. The truth is at any given time each one can be out performing the other.