My question is basically why do people use asset managers considering that they underperform?
I remember from my finance class that a lot of studies were done on performance of mutual funds and etc. and the conclusion was that a person is better of with index fund. That is the conclusion of both efficient market and behavioural finance schools reach.
From Mallaby "More money than god": "Study after study has found that active mutual-fund managers, as a group, do not beat the market. They are charging ninety basis points and delivering nothing. Their fee per unit ofturns out to be infinite."