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January 22, 2018 at 10:05 AM
Vanguard President and CEO Tim Buckley warmed up the crowd at Inside ETFs 2018 on Monday describing his “perfect hedge” for the upcoming Super Bowl.
“I’ll have a happy son with a Patriots win and happy colleagues if the Eagles do,” said the new chief executive of the fund family, which is based near Philadelphia.
He then shared his upbeat perspective on the role of advisors to many of the 2,400 guests at the event taking place in Hollywood, Florida, most of whom are financial advisors.
Despite the ways that technology has “quickly commoditized” many elements of advisors’ jobs — rebalancing, tax-loss harvesting, etc. — Buckley said he wanted to “focus on opportunities.” He did, though, begin his talk with a hard assessment of a few challenges technology has created.
In the past 10 years, fee-based advice has gone from being tied to one-fourth of client assets to one-half; at the same time, $893 billion has move out of equity funds not in the lower-cost quartile of all mutual funds and $829 billion has moved into these lower-cost products, he explained.
“It’s such a tough game in which excess returns are getting lower and lower,” Buckley said of the challenge of beating major market indexes.
A recent study at Oxford University, he explains, found that 58% of advisors and 64% of portfolio managers are susceptible to losing their jobs due to automation.
Vanguard’s own research aimed to dive deep into this disruption. It did so by looking at 18,000 work activities associated with 1,000-plus occupations and breaking daily job tasks into basic, repetitive and advanced categories.
“It’s a flawed assumption to think that each job has only one task,” Buckley said.
While repetitive tasks entail recording information, for instance, advanced activities involve maintaining relationships, applying knowledge, thinking creatively and assisting or caring for others.
