Performance fees - who needs them?

In response to a recent Good Returns story about Harbour Asset Management's survey of performance fees, Pathfinder executive director Paul Brownsey said there was a bigger question to be asked: why have performance fees at all?

"How many other businesses require a performance fee in order for the service provider to do the job they are supposed to do?" he said.

"Do you pay your plumber a performance fee when he keeps the toilet flushing? Do you pay your internet provider a performance fee when access is uninterrupted?

"Do you pay the gardener a performance fee when the flower bed looks nicer than usual? Or an example some finance company directors may appreciate, do you pay your lawyer a performance fee when the sentence is 18 months instead of 2 years?"