I don't disagree that incentive structures drive poor long-term decisions but that's separate from "omg complex 100000 page prospectus". Misaligned perspectives exist whether there's a prospectus or not.
You are right of course, I was just trying to provide an explanation as to why institutional clients aren't more diligent.
They are often not particularly skilled either, as those who can see through the game are on the other side of the trade. Working at a pension fund is not a sexy or exciting proposition by any measure, so talent tends to go elsewhere.
It's the same situation as bright researchers going to finance where they get paid multiples of what they'd earn in their own field.
Once you sign your soul to the devil, it is very difficult to get out. I'm speaking from experience.
