We're getting too distracted by noise, says BlackRock
] chairman and CEO Larry Fink
, and that's hurting investors.
"We have to stop focusing on the moment. We need to focus on outcomes," he said.
Fink made these and other hard hitting comments at the 56th ICI GMM
held at the Washington Hilton in Washington, DC. He participated in a discussion with ICI president and CEO Paul Schott Stevens
before 1,500 or so fund industry executives.
During a discussion that hit upon regulators (the FSOC communicates primarily by leaking to the press, Fink said) and his career ("I was the youngest managing director [at First Boston] at 28, was on the executive committee at 31, and a jerk at 34."], Fink outlined some of his worries about the industry and what he thinks fundsters need to do to address them.
One of his primary concerns, few people are focusing on the long-term challenges of saving for retirement.
"We have to be focused on outcomes in helping our clients more and more. This is something we have not done a good job about as an industry," he said. "It needs to be much louder. You need to focus on outcomes and stay away from the noise."
People are living much longer now, he said, and appreciating that fact would have a big impact on investing attitudes. For example, he noted that he made a half-joking statement a few years back that investors should be "100-percent in equities." People shouldn't laugh too much at the idea.
"People should be over-allocated in equities. People are misallocating their liabilities. The liabilities are longer than we think. People will be living longer. To reach the necessary outcome, you are going to need higher returns than 2 or 3 percent with bonds," he said.
Investors need to get over their fear of stocks.
"Equities are going to be fine. We are going to be living in a world with higher volatility. We may look upon the past five years as the easiest for investing," he said.
Fink called retirement one of the biggest crises looming over us. To address this issue, he said he was in favor of an Australian model of mandatory retirement savings.
The BlackRock chief and his colleagues have been getting loud on the subject of retirement and investing lately around the world.
Fink says he has been arranging meetings between the 15 biggest investors in the world with leaders of six countries, including the president of the United States. He will be hosting another such meeting in the coming weeks. One of the primary focuses of this meeting is how to promote long-term investing.
"This will be the next greatest crisis in 20 years," he said.
Stay ahead of the news ... Sign up for our email alerts now