The advisor to advisors discusses setting plans, dismisses algorithms over humans, and showcases the highest value service that advisors provide.
Our guest on the podcast today is Nick Murray. Nick has written several influential books about investing and financial advice, including The Game of Numbers, Simple Wealth, Inevitable Wealth, and his latest, This Time Isn’t Different. His newsletter for financial advisors is called “Nick Murray Interactive,” and he also frequently leads seminars for financial advice professionals. Nick started out at EF Hutton, then moved on to Shearson and eventually to Bear Stearns. Since then, he has built his career around advising financial advisors.
Nick Murray Interactive newsletters
This Time Isn’t Different: Shockproofing Our Clients
The Game of Numbers: Client Acquisition for Financial Advisors 2010
Simple Wealth, Inevitable Wealth
Nick Murray’s Scripts: What to Say and How to Say It
Behavioral Investment Counseling
Talking It Over, Just The Two Of Us: A Guide for the Financial Advisor’s Life Partner with Joan Murray
Around the Year with Nick Murray: Daily Readings for Financial Advisors
“Financial Advisor Nick Murray,” Bloomberg Masters in Business podcast by Barry Ritholtz, Aug. 7, 2015
“The Man Who Saved My Career: How Nick Murray came along and showed me my true purpose in this business,” by Josh Brown, downtownjoshbrown.com, May 21, 2024
“The Value Proposition of a Financial Advisor With Nick Murray,” The Unlock podcast, May 21, 2024
“The Golden Door For Financial Advice With Nick Murray,” The Unlock podcast, May 31, 2024
“My Financial Planning Heroes: Nick Murray,” by Juniper team, juniperwealth.co.uk/blog, Jan. 1, 2025
“Nick Murray’s Hard Truths for Advisors” by Jane Wollman Rusoff, thinkadvisor.com, March 5, 2015
“Lessons Learned From the Legendary Financial Advisor Nick Murray,” Think Smart With TMFG podcast, Oct. 14, 2022
“Murray: Financial Healing,” Consuelo Mack Wealthtrack, May 6, 2016
(Please stay tuned for important disclosure information at the conclusion of this episode.)
Christine Benz: Hi and welcome to The Long View. I’m Christine Benz, director of personal finance and retirement planning for Morningstar.
Amy Arnott: And I’m Amy Arnott, portfolio strategist for Morningstar.
Benz: Our guest on the podcast today is Nick Murray. Nick has written several influential books about investing and financial advice, including The Game of Numbers, Simple Wealth, Inevitable Wealth, and his latest, This Time Isn’t Different. His newsletter for financial advisors is called “Nick Murray Interactive,” and he also frequently leads seminars for financial advice professionals. Nick started out at EF Hutton, then moved on to Shearson and eventually to Bear Stearns. Since then, he has built his career around advising financial advisors.
Nick, welcome to The Long View.
Nick Murray: Thank you so much, Christine. Thanks for thinking of me in this context.
Benz: We’re really thrilled to have you here. We want to start by talking about your background for people who may not be familiar with you and your work. Can you share a little bit about your trajectory? We know that you were a financial advisor at the beginning of your career, but then shifted over to advising other financial advisors. What was the financial advice space like when you started?
Murray: I started in 1967 with EF Hutton and Company, and frankly, there was no advice space or nothing you could dignify by calling it an advice space. There was a thin veneer of advice over what was essentially a commission-based securities sales business. That was a difficult thing to navigate. It was a difficult thing to get above. I found that the stockbroker paradigm was broken pretty much right away and started to gravitate toward managed money and started to gravitate toward a more planning approach and just kept going. And here I am.
Arnott: You also started out during a really tough environment in the early 1970s. We had the stock market crash in 1973 and ’74, rising inflation, rising interest rates. What did that experience teach you, or how did it influence you when you went through that early in your career?
Murray: Well, it taught me almost everything. I recommend it highly to anybody coming into the business. Get your horror out of the way as quickly as you can because those are the richest learning experiences, at least they certainly were for me. The basic thing that I learned from that long frightful period of seemingly insoluble problems is that problems are insoluble until they’re not. Until, like the stagflation of the 70s, they get solved. The economy begins expanding again, and companies’ earnings start growing up again, and dividends go up again. You end up wishing to heaven that you had had more time and more money to invest during the disaster years. In one sentence, what I learned—and it’s priceless—is that crises end.
Benz: Do you remember your clients panicking during that time and wanting to get out of stocks altogether? Was that a seminal experience for you early on?
Murray: Yes, sure. It was constant. You just sold against it. You tried to find something that they could be comfortable with, and there were plenty of things they could be comfortable with because yields were astronomical at the time. That’s how you stayed alive, and again afterwards you wished that you had just kept buying mainstream equities.
Arnott: As Christine mentioned, you’ve influenced the thinking of many financial advisors. Who or what shaped your thinking about the best ways to improve client outcomes with financial advice?
Murray: Well, it’s nothing much more than what I just said. It’s make a plan, which is the essential thing. Sit down with your clients, and spend the time and energy finding out what their most important financial goals are. Make a plan for the achievement of those goals because that plan, particularly in the case of retirement, will have to be date-specific and therefore your contributions to the plan will have to be dollar-specific. And then finally, the caboose of that process is build a portfolio, which at very long-term rates of return, would fund the plan in the time allotted. And then tune out the noise. Tune out the crisis. Keep acting on the plan above all and not reacting to the markets.
Benz: We want to delve into your new book, which is called This Time Isn’t Different. And it’s a wonderful book. I would recommend it. A key thesis for you in that book and really in a lot of your work is that many activities that advisors might engage in, like trying to generate alpha or forecast asset-class returns, is a waste of their time. You think that advisors ought to be focusing on investor outcomes, as you said, and they ought to do that by counseling their clients on improving their behavior around their investment portfolios. Can you talk about that overall thesis and how that informs so much of what you’ve talked about throughout your career?
Murray: Well, I start from the perception, the hard-earned, hard-won perception, that the dominant determinant of real-life investor outcomes is neither the economy nor the markets, but investor behavior. The investor is hardwired to be his own worst enemy. And what I’ve spent this whole part of my career of three decades-plus is trying to counsel advisors to deal with the fundamental quirks in human nature that investors use to defeat themselves.
Arnott: Have you seen any individuals who can manage their own finances successfully or learn to manage their own behavior after they live through a couple of down markets?
Murray: Well, sure. I think anybody can learn after going through two or three complete market cycles. What works and what doesn’t work in terms of staying the course, in terms of continuing to work your plan and stopping your emotions from letting you react to what the market’s doing. And I’ve had those clients, and thank goodness, and I would say the vast preponderance of my newsletter subscribers have those clients now, again, two or three complete market cycles later, but what I found, and I think what they find, is that that doesn’t in any way encourage the client to do away with our advice. If anything, I think it helps them lean on it harder.
Benz: Another key thesis of your book is that investors need to buy broad equity market exposure and then have the patience and fortitude to hang on. You talk a lot about human nature in the book. You have a section called the “human nature problem.” Can you talk about some of the key issues that are impediments to investors just sticking with that broad market exposure?
Murray: Well, I think all of them attend upon one critical kink in human nature. And specifically what it is, is that in every other aspect of our economic and financial lives, we see price and value as being negatively correlated. That’s an excessively fancy way of saying when prices are lowered, we perceive more value, and we move toward them. And when prices go up, we perceive less value, and we try not to chase that. The entirety of the United States shops on the weekend of Black Friday to Cyber Monday. The whole country. Why does it do that? Is it because over that weekend prices were raised? No, it’s because prices were lowered, sometimes significantly so. The entirety of human behavior migrates toward lower prices, seeking higher value, except in one thing. And of course, it’s investments in general and equities in particular.
And that’s the mother of all sort of hardwired human nature kinks that causes people to fail as investors. And what I’ve said to advisors is 85% to 90% of your job is that, is the management of that. You make a plan. You set goals once. Assuming the goals haven’t changed and don’t change, you make a plan once. Assuming that, you have a portfolio that you’re going to work in so-called good times and bed, you’re going to go straight on. And that is what human nature finds it well nigh impossible to do. And so again, that’s what I suggest is the huge preponderance of an advisor’s craft.
Arnott: You make the point in the book that you think it’s important for advisors to train their clients that they own companies rather than stocks. Why do you think that’s such an important distinction?
Murray: I don’t think that’s important. I think it’s drop-dead critical. Again, because of human nature, everybody believes in the kinds of companies that they do business with every day, whose products and services they consume every day. That’s instinctive, I truly believe. I’m going to turn on my computer and use my Microsoft operating system every day. I’m going to Google something every day. Somebody in my family is going to buy something from Amazon every day. We bank at Chase. I can go on and on like this. And we’re going to do that regardless of what the market is doing. People believe in the companies and in the larger sense, the kinds of companies they do business with every day. If you said to somebody about the 10 largest companies his family deals with every day, if you asked him, would you stop using them if the stock market went down 50%, he’d laugh. He’d say, “no, of course not. I shave every day with the Gillette razor and blade. When we spill stuff, we use Bounty the ‘quicker picker upper.’ And so, we believe in Procter & Gamble.”
And then you turn around and you say the prices of not just 10 of these companies, but 500 of them are down 30%. And the entire populace goes out the window. And so, by far the most effective meme, if you want to call it that, that I’ve found is forcing, as much as they can be forced, forcing clients to think of themselves as the owners of great businesses, rather than as participants in that hissing, writhing bag of poisonous snakes called the stock market.
Benz: We wanted to ask about asset allocation because you are clearly a bull on the power of equities, the long-term power of equities. In the book, you write that the rational seeker of lasting wealth will choose to be preponderantly, if not exclusively, a lifetime equity investor. I’m curious how you think our equity allocations should change as we age and as we get closer to needing to spend from our portfolios?
Murray: I don’t know why they would. I don’t know why anyone would choose to be an investor for the greatest possible long-term total return. The idea that you get out of stocks into bonds in retirement to me is an atrocity because what you’re doing, and clearly you must not be conscious of it, is you are trading off half the long-term return you historically get from staying in mainstream equities to do something else. The long-term real return, 100-year real return of mainstream equities is 7%. And of the most comparable bonds, high-quality corporate bonds, again net of inflation, 3%. What would prompt me—heading into what these days will probably be a three-decade two-person retirement—what on earth would prompt me to abandon half the long-term real historical return of equities to go into the bonds? It certainly can’t be income, because if I go into retirement today and I buy a slug of new 30-year, 6% bonds, then 30 years from now, when either my wife and I are still here, I’m still getting 6% while my cost of living has gone up 2.5 times at the long-term inflation rate.
That doesn’t sound like a really good idea. So, you might consider equities, which, at least since 1960 and probably before, have been raising their dividends at twice the CPI inflation rate, near about. And you would say that’s the real safety, and you’d be right. The most important, most reliable test of an investment’s long-term income-producing capacity is its long-term total return. And when you’re guided by that, you look at equities for the virtual miracle of dividend growth, and you say, for a 30-year run, that’s what I think is the safer bet, literally safer.
Arnott: I guess one risk that people often grapple with early in retirement is sequence-of-returns risk. And if you’re 100% in stocks at the beginning of retirement, you’re sort of fully exposed to that risk. So you do, I think, allow for the possibility that someone might want to have a small amount of cash reserves to offset that risk early in retirement.
Murray: Yes. Your premise is that I’m 100% in equities, and no one would sanely do that. My own benchmarks, which are entirely unscientific, are that you should be holding a year’s living expenses in cash all the time throughout your accumulation period, and entering retirement—again, this is just a ballpark—double that, to two years’ living expenses in a cash equivalent for precisely the reason that you mentioned, which is the sequence-of-returns risk, which in the early years is very, very real.
Arnott: You’ve also said that advisors can generally generate better results by doing less rather than more, but I’ve often seen advisors who feel like they need to show their clients that they’re doing something. Do you think some advisors are inclined to take action because, if they’re sort of sitting back and not doing anything, the client might wonder if their fees are justified?
Murray: But they are doing something, and they’re doing the most important thing that can be done, which is that they’re constantly encouraging the client to keep working the plan, to keep acting on the plan rather than reacting to the markets. Please believe me that in bad markets, that’s almost the wealth manager’s whole job. To me, it’s the platonic essence of doing something. If by doing something you mean selling something, I regard that as immoral. There is no higher value function of a wealth manager than doing the things that people can never do unaided in bad markets. It is literally the highest value service that we provide, and Good Lord, it certainly qualifies as doing something.
Benz: A lot of the book delves into how advisors can train their clients to think about these things and to approach investing downturns. Can you talk about that? How that conversation should work, and you say that that training should begin on day one when the client engagement begins?
Murray: I think I almost think it has to be done by the end of day one. I almost think that if it’s not done or if the putative client is resistant to it, that there shouldn’t even be a day one. Given 30 seconds, here is how I would describe a lifetime of investing in mainstream equities based on the experience of the last 100 years. Mr. and Mrs. Client, I believe that for the balance of your equity investing career, you will be compounding your money, your wealth at around 10%, which is the 100-year nominal return, and around 7% real net of inflation, which goes back to the Jefferson administration—might not quite put it in those terms, but Jeremy Siegel says it does—there is a price to be paid for that. Luckily, it is a psychological price rather than a financial price in the long run.
And that is, about every five years during your equity investing career, both as an accumulator and as a withdrawer, on the average of about every five years, about a third of your capital is going to appear to disappear. There is going to be a significant crisis of some sort in the economy or in finance or the pandemic or whatever. About every five years on average, some howling typhoon will come out of left field, slam into the equity market, and take it down by an average of about a third. If I sit down and laboriously go through the whole record of the S&P 500 from Korea to now, this is what it will bottom line to: A 10% compound nominal return, 7% after inflation, and about, again, not to belabor it, but a crisis of sufficient magnitude about every five years to temporarily take your wealth down by a third. The challenge will be not just for you to ignore that, to not sell into it, but to continue funding your plan because those will be the highest value investments you make.
Arnott: Even if you’re someone who understands that markets go through cycles, and every five years or so, there’s going to be a big downturn, every market downturn seems to have a different catalyst and different types of companies get hit the hardest. We went through the pandemic, which was a unique situation. Earlier this year, we had the big market downturn with the tariff announcements. How can advisors work with their clients to explain why this time really isn’t different, even if it seems to be a uniquely different or bad downturn?
Murray: It doesn’t seem to be uniquely bad. It is uniquely bad. The essential human response, the four-word death song of the equity investor is “this time it’s different.” The damnable part of that is that, at the surface, it is. The tariff tantrum had nothing in common with the pandemic, which had nothing in common with the global financial crisis, which had nothing in common with the implosion of the dot-com bubble and the liquidation of the equity markets. Of course, it’s different. Of course, it comes out of left field. What you have to realize, because history allows you no other conclusion, is what we said just at the top. The insoluble problem somehow gets solved, although when you’re going through it, you will not be able to see how. As it gets solved and when it gets solved, the innovative greatness of the great companies reasserts itself in increasing earnings and dividends. I mean, lord, we’ve had seven, count them, seven genuine investor panics in the last 25 years. At the beginning of the first one, which was the dot-com bubble, the S&P was 1,500. The other day, it touched 6,000. If you invested the night before the dot-com bubble burst in March of 2000--$100,000 invested in the S&P 500 the night before that happened and left to compound—is today, seven crises later, $635,000. If that doesn’t do it for you, I can’t do it. I just can’t do it. If the long-term power of the great companies, which hideously overwhelms the temporary downturns, if watching that happen seven times in 25 years doesn’t do it for you, I’m out of bullets.
Benz: I wanted to ask Nick about your emphatic point in the book about current events, how they are something that advisors should not be talking about with their clients. But I will say when I’m out in the world, I frequently get questions from people who know what I do about what has happened in the market today or yesterday or whatever. And I kind of look blankly at them because I don’t pay close attention on a day-to-day basis. And I see them look back at me sort of like, “What is she doing? How could she be very good at her job because she’s not paying attention to these things?” How do advisors fight that feeling that they might have, that their clients might think that they’re missing out on things for them?
Murray: Again, I’m not sure how to answer that other than the way I have. If you believe, as I believe, that the only sure way to lasting wealth is a set of goals, a plan that funds those goals in the time allotted, and a portfolio that historically supports that plan optimally, you realize that you’re never going to change your portfolio unless and until your goal is changed. You’re never going to change your portfolio in reaction to the markets. And so, the more I talk to you on a day-to-day basis as your advisor, the more I make chatter or commentary to you about current events, or even try to answer unanswerable questions about current events, but especially talking to you about them when they’re good, in spite of myself, I’m focusing you on the wrong thing. And I hope I have the elemental sense of self-preservation not to do that. I don’t cheer with you when the market’s up, and I don’t mourn with you, much less panic with you, when the market’s down. We’re continuing to work our plan. The market’s up today because it took a happy pill about GDP or the employment report, or it’s down today because it’s upset about tariffs or Middle East tensions or whatever people are upsetting themselves with today. I have to keep it as far outside the essential conversation as I humanly can because it’s a death trap. It’s just a death trap.
Arnott: Do you think it’s helpful for the advisor to kind of acknowledge the fact that there are a lot of headlines that might make them feel nervous or there’s always a lot of chatter about the market?
Murray: I’m not sure I understand the question, but I’ll be happy to do that for him. And I think all my subscribers do that for them, that they’re very proactive about going to their clients and saying, “I acknowledge that this is a very serious problem. I acknowledge that the market is very seriously responding to it, and I remind you that the market can’t be timed. That getting out, even if you regard that as temporary, is the beginning of the end because you will not be able to time your reentry, and you will end up because”--and we haven’t talked about this because we haven’t really talked about markets that much, but let us acknowledge, as I insist that we do to our clients— “that at the end of the most serious downturns, the market explodes off the low.” Find me another one. I mean, find me one that didn’t, where you had a savage drawdown in the market that virtually one day didn’t explode. I cite the last two examples. Tariffs are the end of the world. Intraday, we’re down over 21% from the peak on the 7th of April. And Trump turns around and says, “Oh, OK, well, we’re going to postpone them for 90 days.” And here we are. I mean, it exploded. Look at covid. The market was down 34% in 33 days. And the next morning, Jay Powell said, “OK, we see the depth of this. There will now be no dollar limit to the extent to which we, the monetary authorities, will support the economy.” And the market explodes, explodes in a day. Don’t ever let yourself get tempted, even temporarily in your mind, with getting out of a significant decline, because the odds against that working are horrifying.
Arnott: We’ve talked a lot about the dangers of fear and panic selling. But what about the flip side of that? Often when the market is doing really well for a number of years, we see the speculative euphoria or fear of missing out. How can advisors keep their clients from the temptation to pile into the hottest parts of the market after they’ve already gone up?
Murray: Well, it’s the same problem. It’s the human nature problem of identifying price with value. The thing that makes people crazy to chase something that’s up 100%, 200%, 300% is the same thing that makes them panic out of something that’s down 30% to 40%. It’s the confusion of price with value. The more something goes down, the more risk human nature sees in it, which is counterintuitive. The more something goes up, the more potential human nature sees in it, which is the same counterintuitive response. That’s philosophically, psychologically, for whatever comfort it gives one, the explanation. The mechanism, of course, for managing that terrible, terrible instinct is rebalancing. If I have started you off with a portfolio that we have agreed we’re not going to change unless your goals change, we have probably started off with a portfolio that is apportioned to certain percentages of certain disciplines if for no other reason than for the sake of diversification.
The second step in that plan, which we implement annually, is rebalancing. If we have said that we want you to be 20% in five different disciplines, and we wake up at the top of a bubble and one of the five is 40% of the portfolio and the other four are bleeding into the carpet, the act of rebalancing, in the act of bringing the portfolio back to its planned diversification, we will end up doing the wildly countercultural act of kicking out the stuff that’s up, to some extent, in order to bargain-hunt among the stuff that’s just lying there. That, to me, is the mechanical answer. If I’ve trained you to rebalance, what I’ve subtly done, or maybe not so subtly, is I’ve trained you to act counterintuitively at least once a year by lightening up stuff that’s shooting the lights out and redeploying it in things that have much more intrinsic value, at least relative to the stellar performers. Rebalancing is the mechanical answer.
Benz: Wanted to follow up on that, Nick, because if I own, say, a broad market index fund, I’m presumably missing out on those rebalancing opportunities, right? Is there anything wrong with just owning maybe total US stock market, total non-US stock market, and calling it a day?
Murray: Heck no. There’s nothing wrong with that at all. And many of my subscribers, by trial and error, come to see it as being ideal. I have one wonderful subscriber, a deeply thought person, from the jump, from day one, from when he was in college, and then when he was in the National Football League, he saw that what you ought to be doing for an investing lifetime, he felt, was to own the whole market. And I guess he owns some sort of whole market fund. And if you’re his client, that’s what you own. And is there anything wrong with that? Good heavens, no. And if you do it, do you sacrifice the opportunity to rebalance? Yes, you do, but I think it’s, long term, a very well compensated sacrifice.
Arnott: What do you think about advisors letting clients have sort of a mad-money type of portfolio off to the side for people who really want to experiment with picking stocks or buying bitcoin or sector funds or …?
Murray: Or something else equally stupid. My attitude toward it is, if that’s what it takes to take the pressure off me and take the pressure off you as a client, if you are just bound and determined to take some small portion of your portfolio and do something crazy with it, go ahead. Take 3% to 5% of your invested net worth, go away and do whatever it is you are going to do someplace else. I don’t want to know what you’re doing, and I certainly don’t want to be compensated for what you’re doing because I never want to be asked an opinion of what you’re doing. But again, if that’s what it takes, then OK. Much beyond that, I think we’re circling the drain.
Benz: In This Time Isn’t Different, you mentioned the need for advisors to be more active about pre-identifying potentially problematic prospects or clients in advance. In your experience, is it difficult for advisors to do that and also to walk away because, presumably, most advisors do want to try to build up their book of business? How should advisors address that problematic client in advance?
Murray: Well, you’ve identified the two greatest but very different most painful thing advisors have to do. In the book-building segment of their lives, they have to find the courage, which is really in the long run, the self-interest, to kiss off “inappropriate clients,” to see that no matter how much in assets this person might bring to your nascent practice, you’re sowing the seeds of a disaster. And you know that in 15 minutes. The courage, I repeat, actually long-term self-interest, to turn those people away is the single hardest thing any advisor has to do. And he has to do it when he’s out there thinking about the mortgage payment every month, when he has the least financial support for the decision. And I went through that there’s no advisor extant who didn’t go through that. And the completely other thing, although maybe you’re right, it’s an aspect of the same problem, is walking away. And here, at least you have the support of an otherwise mature or relatively mature practice.
But there will come times, human nature being what it is, there will come times when the relationship degenerates, hopefully not because of anything that you’ve done or not done, but just human nature. How many of my subscribers have “lost” accounts to bitcoin? Or lost them to the Magnificent Seven? In other words, people who took their whole portfolios because the advisor wouldn’t stand for it and went someplace else to do something that the advisor knows is suicidal. And you have to come to that point. The advisor has to come to the point where he says or she says, “I can no longer serve you. I certainly won’t do, because it’s immoral, the things that you want to do or want me to give you permission to do with your portfolio. And so, it would appear if you want to continue down this path that we’ve come to a parting of the ways.” I think, frankly, those things never stop happening, even in the most successful practices. And that, in a very real sense, the advisor who says to a $5 or $10 or $15 million account, “You have to go do what you want to do someplace else,” that that’s his finest hour. That that’s the real act of heroism in our calling.
Arnott: And do you think it’s helpful for the advisor to leave the door open if the client presumably has a bad experience and learns from their mistakes? Have you heard from any advisors who have been able to work with the same client again after that learning experience, I guess you could call it?
Murray: It’s a very reasonable question. And my answer is rarely. I have rarely, certainly, a distinct minority of the instances where somebody goes away, blows himself up and comes back and says, “mea culpa, mea culpa, please take me back.” A, I don’t think that actually happens very often for the very human reason that the person doesn’t come back because he won’t admit the mistake. But when he comes back, I don’t think there’s a rule. I think it’s case by case. Tell me how much acrimony or personal animus was involved in his going out the door, and I’ll tell you within certain tolerances, probably, whether that’s a relationship that can ever be repaired or whether there’s any reason to think that the person will in the long run behave any better.
Benz: I wanted to dial out a little bit and discuss the financial advice industry at large. In a previous conversation with me, you said that what the financial advice industry has grown into, what it’s evolved into, is astonishingly inconceivable. Can you talk about what aspects of the industry surprise you the most?
Murray: Well, the short answer is the depth, the quality, and the holistic nature of the advice we can offer today. I have newsletter subscribers who are the heads of, say, 20- and 30-person teams, who can serve the whole client, the whole client, better than, more deeply than, EF Hutton and Company could have dreamed of doing on the day that I joined it in 1967. And believe you me, EF Hutton was as fine a firm as there was in those days. It was just constrained to a silo of counsel. It was Glass–Steagall time. There was, for all intents and purposes, no advice industry. There were stockbrokers and there were banks and life insurance companies, and they all sold against each other, each one trying to convince you that the other twos’ products were poison. You could hardly dignify that by calling it an advice industry, and I do not. And so if you’re coming from that anti-diluvian paradigm, you’re gobsmacked, you’re thrilled is not too strong a word, by the quality of advice that is routinely being offered at the top of this profession. I have to feel that the profession grew into, grew beyond my wildest dreams, into the wonderful, wonderful calling that it became.
Arnott: So despite the evolution of the industry, it sounds like you’re a skeptic of the idea that advice can be digitized through robo-advisors or ChatGPT or what have you. You’ve said that you think there should always be a human element. Can you discuss that a little bit more?
Murray: Let me start by saying you would never want to dignify me by calling me a skeptic of that thesis. You would more accurately refer to me as a hater and dismisser of that silliness. I mean, we could do another hour on this, but what it comes down to is that financial advice at the deepest human level is almost indescribably personal. Most good financial advice is given, and all good financial advice is taken, by people at least metaphorically looking into each other’s eyes. There is, at the end of the day, no algorithm for empathy, and until there is, this will always be as personal if not more personal a craft than, say, medicine.
Benz: I wanted to ask about niches—advisors pursuing very specific client profiles. Michael Kitces has written about this, and many other people who examine the advisor space have as well. How advantageous it can be to be quite focused on a specific segment, whether it’s dentists selling their practices or women in technology or whatever the case might be. Do you agree that that’s an attractive way to go about building a business, especially because it seems like those clients might be inclined to have some similar sort of behavioral characteristics and orientations?
Murray: I guess all I can say is it might be for a certain kind of personality, and I would add that I know of people who’ve done that, narrowed themselves that way and succeeded at it. First of all, I could never have done that, at any point, I would never narrow myself that way to what has been for me the richness of human experience. Would I encourage someone just coming into the business to do that? I couldn’t do that. It works for some folks, and good for them, is about all I can say.
Benz: Well, Nick, it’s been such a treat to have you here. We have thoroughly enjoyed this conversation. Thank you so much for taking time out of your busy schedule to be with us.
Murray: Again, Christine and Amy, it is I who are thanking you. I’m not a podcast person to say the least, and I was honored and remain honored that you would have thought of me in this context, and I’m more impressed than I can say by the level of preparation that you put into it, and I hope I’ve responded in kind. Thank you.
Arnott: Well, thank you, Nick. We really enjoyed talking with you.
Benz: Thank you for joining us on The Long View. If you could, please take a moment to subscribe to and rate the podcast on Apple, Spotify, or wherever you get your podcasts. You can follow me on social media @Christine_Benz on X. Or at Christine Benz on LinkedIn.
Arnott: And at Amy Arnott on LinkedIn.
Benz: George Castady is our engineer for the podcast, and Kari Greczek produces the show notes each week. Finally, we’d love to get your feedback. If you have a comment or a guest idea, please email us at thelongview@morningstar.com. Until next time, thanks for joining us.
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