Joe Duran, CEO and founder of United Capital Financial Partners, is the advisor’s anti-robo thought leader. He launched the firm about 12 years ago after asking himself, "How about building a company that starts with your life and ends with your investments rather than the other way around?"
The firm includes an RIA and a consulting affiliate. It has close to $18 billion in assets under management and 80 offices; it recently rolled out FinLife Partners, a white-label advice, training, planning and investment management platform.
“I think of myself as the champion of the human advisor,” Duran said in an interview. “I worry deeply that most of industry is like the walking dead and doesn’t know it yet.”
(Related: Why RBC Wealth Is Saying ‘Hold the Robo’)
By this he means that advisors' “mission-critical” role is to be human and focus on financial and life planning while letting machines do the number crunching. “Humans need other humans to make good choices … and to provide the understanding and discipline that machines aren’t capable of providing,” he explained.
Duran grew up in war-torn Zimbabwe, studied at Saint Louis University and went on to become president of Centurion Capital, an investment advisory firm later sold to General Electric. Over the years, he has written several popular books about money and business, such as “The Money Code: Improve Your Entire Financial Life Right Now.”
“I am a big fan. I’ve read his books and heard him speak. He’s really on to something,” said Tim Welsh, head of the consultancy Nexus Strategy. “Joe is trying to move the industry away from the commoditization of investment advice, and he’s doing that with financial planning and using that as the value-add for advisors.”
In the future, the role of human advisors “will be eviscerated” by technology and thus they must become “bionic,” Duran said, meaning they should let machines do some tasks while evolving in how they conduct human relationships. “Understand the client and help them better understand both themselves and their entire financial life,” he explained.
In a recent blog, Duran explained that digitization “ultimately makes anything code-based commercially viable at costs close to zero because variable costs for processing are negligible.”
For the wealth management space, this means machines can crunch figures for both advisors and clients “very efficiently” with index funds and factor-based ETFs being strong examples. “Soon it will be true for basic goals-based planning, and eventually (much sooner than you might imagine) for more advanced planning as well,” he wrote.
The key question for those in the industry, according to the United Capital leader, is: “What’s a human advisor valuable for if planning and investments are on their way to being free?”
In typical Duran fashion, he shared a view that is both genuine and right on the mark: “Perhaps the answer is less in our brains and more in our hearts.”
The two best strategies for advisors to emphasize in today’s increasingly digital world are to focus more on understanding clients and helping them improve their discipline.
“Our value is in helping people grasp consequences and make the right decision when they feel overwhelmed,” he explained. This includes asking them direct questions and appreciating both their firm and less-direct answers — which may be expressed with words, gestures or movement.
“Being relevant requires understanding our clients better than anyone else, helping them optimize their decisions around their entire financial lives and making them feel good about how their financial lives are unfolding,” Duran wrote.
As for discipline, technology can show clients and advisors when they are “off course, but they aren’t going to hold you accountable, manage the messy complexity of human application of ideas and ensure you make the right decision,” he said.
This role “is the something only humans can help other humans do,” Duran concluded. “It is where our industry must live to be relevant.”
--- Read Frontrunners: The 2017 IA 25 on ThinkAdvisor.