The financial services industry is “blessed” with an abundance of highly sophisticated information. At a single click, investors can obtain—at no cost—oceans of data for which one formerly had to pay princely sums.
And in comparison, financial advisors are provided still greater royal treatment. Former presidents, secretaries of state, generals, NFL or NBA coaches, famous economists and more are ubiquitous at the advisor conferences I attend.
But my quote marks around “blessed” were not accidental. The barrage of data, even the valuable kind for which one pays (or used to pay) dearly, ranks below wisdom, which is and always was far harder to obtain. Yet I knew I was in for a rare course in wisdom from the first Q&A response in our cover story, “Nick Murray’s Hard Truths for Advisors.”
Reporter Jane Wollman Rusoff dutifully asked, and Murray forcefully shot down, her question about the gathering market storms, saying that an advisor focusing on current events is “doomed …. Nobody’s job is selection and timing; everybody’s job is planning.”
The venerable advisor coach went on to say that “all financial success comes from acting on a plan. A lot of financial failure comes from reacting to the market.”
The rest of the interview glitters with many such pearls of wisdom, but let’s focus on why this particular hard truth is vital to a financial advisor’s value proposition. It is because in investing, as in life, one can only influence what is within your control.
Neither you nor your client can control the end of QE nor influence the direction of interest rates. And while one should remain informed of the flow of events, Murray is at pains to warn against making reactive portfolio decisions, emphasizing instead the need to create and follow a long-term plan.