Financial advisors are stuck in a rut when they should be basking in their profession's "golden age," Nick Murray said.
Addressing the 2017 Inside Retirement conference in Dallas on Thursday, Murray, a prolific author and publisher, told advisors that they were living in the best of times for their industry despite their worries about disruption and regulation.
“Holistic financial planning … is among the noblest professions that anybody can overtake, and this is it’s golden age,” said Murray. “I know how upsetting it can be, suggesting that people can be optimistic about the future of this profession, but the sentiment has gone beyond skepticism.”
Murray said that advisors and the journalists who serve them prefer to “throw rocks” instead of acknowledging the unprecedented opportunities available to them.
He noted that the dominant story lines in recent months have been about the Department of Labor’s fiduciary rule, fee compression, robo-advisors, increased competition and the election of President Donald Trump.
“I was born a fiduciary and so were, I think, most of the people in this room,” said Murray. “My family were fiduciaries on both sides all the way back. My grandfather sailed here from Ireland on the HMS Fiduciary. We’ve been on top of this for quite a while. We do not need the government, who gets absolutely nothing right ever, to tell us what fiduciary means.”
“Robo-advisor—I’m 50 years in the business, and this is the single stupidest idea I have ever heard,” said Murray. “Robo-advisor is a contradiction in terms. Robo is a robot, advisor is a human, and never the twain shall meet. … if you are for more than 10 seconds worried about a robo-advisor, you have no value proposition. You don’t know what it is that you do.”
Importantly, robo-advisors and other technological solutions have no way to guide investor behavior or react to clients’ emotions—qualities that make human advisors indispensible, Murray said.
Murray also said that advisors shouldn’t be so concerned about fee compressions. If clients want to leave their services for cheaper offerings online or at a bank, they were probably poor candidates for advice in the first place, he said.
“Planning proper retirement accumulation, planning proper retirement distribution and planning that something should be left over for legacy is priceless, and somebody wants me to believe that if I’m charging a point, that a guy is going to call me up and say you know what, my bank or trust or credit union is willing to do whatever you do for 25 basis points less?” Murray asked. “I’m going to be worried about that? I’m going to say to that guy, put the phone down and run down to the bank, fill out the paperwork before they change their minds. If you think anybody, much less a bank, can do what I do for 25 basis points less, you and they deserve each other, and the sooner I get you two together, the happier we will all be.”