Simonoff: You mentioned the migration from commission to fees. What were the implications of this change, and do you by and large think that it's positive for all the players involved?

Murray: Yes. It's a gigantic net-positive for everybody except commission-based advisors who had small amounts of money under management and were turning it over too often. It's arguably the single best thing that ever happened in my career.

Fees put the advisor and the advisee on the same side of the table, squarely and solidly, for the first time in my career. Fees create a linear relationship between the long-term investment success of the client and the long-term income of the advisor. Even when the markets deal out short-term pain to the investor, he can take some comfort from the fact as it is a fact that his advisor is taking the same percentage income hit. Not only does the advisor prosper as the client prospers, but if there's any comfort in this, the advisor suffers when and to the extent that the client suffers.

That's one of the great benefits of fees. The other, frankly, is that the advisor is now not only rewarded but incented to tell the client to do nothing when, as it almost always is in a properly-structured goal-oriented portfolio, nothing is the right thing to do. With commissions, even when the right thing to do is nothing an advisor couldn't get paid to tell anybody that.

Simonoff: What changes do you expect to see over the next 10 years?

Murray: Well, the obvious ones are a combination of the continuing globalization of financial services, which is a very, very powerful force and in the industry in the largest sense, and I think has potentially though not automatically great advantages for the American advisor and a general raising of the ante, which depends upon continuing consolidation in the industry. Consolidation and convergence are not the same thing. They're two very different things, but the combined effect of both and each is to raise the ante. Citigroup destroyed Glass-Steagall, and that was the most important thing that it did or that anybody could do at that precise moment in history.

But the other thing that Citigroup did is by an order of magnitude was to raise the ante. And I think that that is a process that is still playing out and has a long way to go, a long way to go.

Those are sort of the big macro changes-convergence, globalization and consolidation-among which there's a lot of overlap. As far as the business is concerned, you have to realize that at this juncture, weighted for income and age, the whole country's turning 55.

Simonoff: Yes.

Murray: Now that would not be true if you just said weighted for income-I mean weighted for net worth. But weighted for income and assets, the whole country is turning 55. I mean intuitively and from personal experience, somewhere in there comes the magic moment when you stop being portfolio-oriented and overnight practically become planning-oriented.

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