Market updates from your financial adviser may sound useful, but research shows they often add more noise than value. Here’s why focusing on evidence-based planning is a smarter defence against uncertainty.

 

It’s a hectic weekday morning, and your phone pings with an email from your financial adviser. The subject line reads: “URGENT: Market Update – Navigating Uncertain Times.” You open it while having your morning coffee, scanning through charts showing recent performance, commentary on interest rate speculation, and warnings about geopolitical tensions affecting emerging markets.

By the time you’ve finished reading, you’re wondering whether you should be doing something different with your investments. Should you reduce your equity allocation? Move money into cash until things settle down? Perhaps it’s time to have another conversation with your financial adviser about “protecting your gains”.

If this scenario feels familiar, you’re experiencing what Nick Murray, one of the financial advice industry’s most respected voices, considers a fundamental problem. In a recent interview on Morningstar’s The Long View podcast, Murray argued that constant market commentary from financial advisers systematically undermines their clients’ long-term success.

 

What Nick Murray learned from 50+ years in financial advice

Nick Murray has been in the financial advice profession since 1967. His experience through the 1970s stagflation, multiple market crashes, and decades of crisis cycles has shaped his understanding of what actually drives investment success.

“The basic thing that I learned from that long frightful period of seemingly insoluble problems is that problems are insoluble until they’re not,” Murray explained in the podcast. “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.”

This hard-won wisdom led Murray to a counterintuitive conclusion: the biggest threat to investor success isn’t market volatility or economic uncertainty. It’s the constant commentary about these events that prompts emotional decision-making.

“The dominant determinant of real-life investor outcomes is neither the economy nor the markets, but investor behaviour,” Murray stated. “The investor is hardwired to be his own worst enemy.”

 

The problem with constant market commentary from your financial adviser

Murray’s insight gets to the heart of why monthly market updates feel helpful but actually cause harm. When your financial adviser sends regular commentary about current events, they’re conditioning you to evaluate your financial strategy based on recent market movements rather than your long-term plan.

“The more I talk to you on a day-to-day basis as your adviser, the more I make chatter or commentary to you about current events…I’m focusing you on the wrong thing,” Murray explained. “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.”

This creates what behavioural economists call “recency bias” – the tendency to give greater weight to recent information when making decisions. Academic research supports Murray’s observation. Nobel laureate Richard Thaler recommends investors “buy a diversified portfolio heavily tilted towards stocks…then scrupulously avoid reading anything in the newspaper aside from sports section” (Thaler, R. H., 2015).

The problem becomes worse for successful professionals who are accustomed to making strategic decisions based on current information. In business, this approach works brilliantly. In investing, it becomes wealth destruction disguised as sophistication.

 

Why market updates trigger costly investment mistakes

The research on market commentary’s harmful effects is extensive. When University of California researchers Brad Barber and Terrance Odean studied 66,000 individual brokerage accounts between 1991 and 1996, they found that active traders earned only 11.4% annually versus 17.9% for the market — a staggering 6.5 percentage point annual underperformance (Barber, B. M., & Odean, T., 2000).

 

 

The cause wasn’t lack of intelligence or access to information. These investors were failing because they were making emotional decisions based on current market commentary. The researchers concluded that “trading is hazardous to your wealth” — a finding that directly supports Murray’s behavioural focus.

More recent research has quantified exactly how this happens. Studies show that financial media consumption systematically increases overconfidence bias, which Nobel laureate Daniel Kahneman identified as the most damaging cognitive error affecting investment outcomes (Kahneman, D., 2011). Even sophisticated investors spend a median of only six minutes researching trades, yet media consumption creates false impressions of expertise that encourage harmful overtrading.

Murray sees this pattern constantly: “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.” The challenge isn’t the inevitable market downturns — it’s the adviser commentary that makes clients want to react to them.

The pattern is predictable and devastating. During market downturns, investors who consume regular market commentary become increasingly anxious. Monthly updates from their financial adviser, intended to be reassuring, actually heighten awareness of short-term volatility, leading to selling near market bottoms.

During market highs, regular commentary about strong performance triggers overconfidence and encourages adding more risk or chasing recent winners, leading to buying at inflated prices.

Academic research shows that missing just the 10 best market days over 20 years reduces returns by more than half, while missing 60 best days results in 93% lower returns (Dalbar, 2021). Yet investors who consume regular market updates are most likely to be out of the market during these crucial recovery periods.

 

Nick Murray’s alternative approach to financial adviser relationships

If market updates aren’t helping, what should you expect from a valuable financial adviser relationship? Murray’s approach, refined over decades of client work, focuses on what he calls the essential adviser function: behavioural coaching.

“What I’ve spent this whole part of my career of three decades-plus is trying to counsel advisers to deal with the fundamental quirks in human nature that investors use to defeat themselves,” Murray explained.

The key insight is that the most valuable thing financial advisers do isn’t provide market insights or fund selection – it’s to prevent their clients from making emotional mistakes during volatile periods.

“Please believe me that in bad markets, that’s almost the wealth manager’s whole job,” Murray stated. “To me, it’s the platonic essence of doing something. There is no higher value function of a wealth manager than doing the things that people can never do unaided in bad markets.”

This is supported by rigorous academic research. Russell Investments’ 2022 study found that advisers following evidence-based practices could add up to 4.91% in additional returns, with the breakdown revealing where this value actually comes from:

 

Notice what’s missing: market timing, fund selection, and tactical asset allocation adjustments based on current events. The largest component comes from behavioural coaching (Russell Investments, 2022).

Even Nobel Prize-winning finance professor Kenneth French employs a financial adviser, calling it “the most valuable check we write” — not for superior security selection or market timing, but for tax planning, estate planning, and behavioural coaching (French, K. R., 2008).

 

The human nature problem that destroys investment returns

Murray has identified what he calls the “human nature problem” that makes market commentary so destructive. “In every other aspect of our economic and financial lives, we see price and value as being negatively correlated,” he explained. “When prices are lowered, we perceive more value, and we move toward them. And when prices go up, we perceive less value.”

This works perfectly for everything except investments. “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.”

But with investments, this natural instinct becomes destructive. When stock prices fall, investors see danger rather than opportunity. When prices rise, they see potential rather than risk. Market commentary amplifies these harmful instincts.

Murray’s solution involves reframing how clients think about their investments: “By far the most effective meme…is 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.”

This ownership mindset helps investors stay focused during volatility. As Murray points out: “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.” These businesses continue operating regardless of daily stock price movements.

 

The evidence-based alternative to market commentary

The alternative to market-focused advice is evidence-based investing — an approach that grounds investment decisions in peer-reviewed academic research rather than market predictions or current economic commentary.

Paul Samuelson, a Nobel laureate, concluded in 1970 that most investors are better served by passive strategies due to the inherent difficulty and costs of active management (Samuelson, P. A., 1970). This position has been strengthened by 50 years of subsequent research showing that 80-90% of active funds underperform passive alternatives over 10-15 year periods after accounting for fees and taxes (Malkiel, B. G., 2019).

Murray supports this evidence-based approach: “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 bad, you’re going to go straight on.”

Evidence-based investing recognizes that markets are largely efficient, meaning current prices already reflect available information. This makes market timing extremely difficult, even for professionals with vast resources. Instead, this approach focuses on factors that actually drive long-term returns: broad diversification, low costs, appropriate risk levels, and consistent implementation.

Most importantly, evidence-based investing provides a framework for ignoring market noise without feeling irresponsible. When academic research consistently shows market timing to be ineffective, you can confidently ignore monthly market updates without worrying about missing something important.

 

Building wealth through comprehensive financial planning

While evidence-based investing handles the portfolio construction, true financial success requires broader financial planning that addresses all aspects of your financial life.

Murray emphasizes this planning-first approach: “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…And then finally, build a portfolio, which at very long-term rates of return, would fund the plan in the time allotted.”

This sequence is crucial: goals first, plan second, portfolio third. Most financial adviser relationships get this backwards, spending meeting time discussing recent market performance rather than planning questions that determine financial outcomes.

Effective financial planning starts with clarity about your goals and values, then builds a comprehensive strategy to achieve them. This includes cash flow planning, retirement planning, tax planning, estate planning, and protection planning – all coordinated to work together efficiently.

The key insight is that your investment portfolio exists to serve your financial plan, not the other way around. Once you have a well-constructed plan with appropriate asset allocation, monthly portfolio performance becomes largely irrelevant to long-term success.

 

What to expect from a truly client-focused financial adviser

Murray’s decades of experience point to clear characteristics of advisers who prioritize client success over impressive-sounding market commentary:

Minimal market commentary: The best advisers communicate with clients only when necessary — after major market events to provide reassurance, when client circumstances change, or during scheduled reviews focused on planning rather than performance.

Planning-focused meetings: Instead of discussing recent market movements, meetings focus on financial planning topics: retirement projections, tax planning opportunities, estate planning considerations, and goal progress.

Evidence-based investment approach: Investment decisions are based on academic research rather than market predictions. The focus is on broad diversification, low costs, and appropriate risk levels rather than tactical adjustments.

behavioural coaching expertise: The adviser acts as a behavioural coach, helping you avoid emotional decisions during volatile periods and stay focused on long-term goals.

Transparent fee structure: Rather than charging fees based on asset values (which creates incentives for complexity), the best advisers use fixed-fee structures that align their interests with yours.

Murray is particularly strong on this point: “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.”

 

The cost of ignoring Nick Murray’s advice

Murray has witnessed multiple generations of investors making the same mistakes, often encouraged by well-meaning advisers who focus on market commentary rather than behavioural coaching.

“I cite the last two examples,” Murray said, referring to recent market panics. “Tariffs are the end of the world. Intraday, we’re down over 21% from the peak…And Trump turns around and says, ‘Oh, OK, well, we’re going to postpone them for 90 days.’ And here we are…Look at covid. The market was down 34% in 33 days.”

His point is crucial: “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.”

The statistics support Murray’s warnings. Dalbar’s Quantitative Analysis of Investor Behaviour consistently shows average equity fund investors achieving returns approximately 44% lower than S&P 500 returns over 30-year periods (Dalbar, 2021). A $100,000 investment grew to $2,082,296 for the index versus only $789,465 for the average investor – a difference of over $1.3 million caused primarily by poor timing decisions.

 

Taking control of your financial future

At rockwealth, we don’t outshout the media or pretend to predict the unpredictable. We build financial plans around your life, not around the news cycle. Our evidence-based portfolios keep costs low, our fixed fees provide clarity, and our planning-first approach keeps you focused on what really matters: living a purposeful, fulfilling life.

If you’d like to review your financial plan or stress-test your retirement income strategy, get in touch. Your best defence against market noise isn’t faster news — it’s a resilient, goals-driven plan built to stand the test of time.

 

References

Barber, B. M., & Odean, T. (2000). Trading is hazardous to your wealth: The common stock investment performance of individual investors. Journal of Finance, 55(2), 773-806.

Dalbar. (2021). Quantitative analysis of investor behavior. Dalbar Inc.

French, K. R. (2008). Presidential address: The cost of active investing. Journal of Finance, 63(4), 1537-1573.

Kahneman, D. (2011). Thinking, fast and slow. Farrar, Straus and Giroux.

Malkiel, B. G. (2019). A random walk down Wall Street: The time-tested strategy for successful investing. W. W. Norton & Company.

Murray, N. (2024, December). Interview with Christine Benz and Amy Arnott. The Long View [Podcast]. Morningstar.

Russell Investments. (2022). Value of an adviser study. Russell Investments.

Samuelson, P. A. (1970). The fundamental approximation theorem of portfolio analysis in terms of means, variances and higher moments. Review of Economic Studies, 37(4), 537-542.

Thaler, R. H. (2015). Misbehaving: The making of behavioral economics. W. W. Norton & Company.

 

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