Unshakeable by Tony Robbins: The Right Diagnosis, the Wrong Prescription?

A few readers asked if I would take a look at Tony Robbin’s new book Unshakeable and offer up my thoughts.  (We reviewed his last book Money a few years back here.)

Most of my comments from the last review stand:  I think Tony is a genuinely decent person, clearly has helped a lot of people over the years, and is donating all of the proceeds to feed the poor – two thumbs up across the board.

So I read the new book on the plane home the other day, and a few quick thoughts.  Robbins gets some of the major muscle movements absolutely correct.  He reveals the many conflicts of interest in the industry, he suggests using a registered investment advisor (RIA) instead of a broker, avoiding emotional and behavioral errors, and implementing the allocation using low-cost funds in a global allocation.  Again, great advice across the board that is near impossible to argue with. (Though he does bring up the dreaded 10 Best Days Myth.)

The challenge comes in the implementation.  Tony has partnered up with one of the largest RIAs in the country, Creative Planning.  (Who, by the way, let’s you know repeatedly they are the highest rated investment advisor by Barron’s.  So much that they registered the domain www.thenumberonefirm.com to route to their website.  Eesh…)

You can find their fee schedule in their ADV here.  And for accounts up to $500k the fee is 1.2% (1% up to $2m, and declining thereafter all the way down to 0.25% at the $100m break point ;)) This is in addition to fund fees but it looks like they mostly use low-cost ETFs.Oddly enough, his old partnership at Stronghold for book one charged 0.75%.  (It looks like Creative Planning has now acquired Stronghold and Gupta.)

1.2% is expensive relative to the average advisor fee of 1%.  It’s not god awful, but it’s expensive. I’ve mentioned a thousand times financial advisors can be worth their weight in gold and certainly worth their 1% fee if they deliver value added services.

But the problem with his advice is that the world has now passed him by.  Most automated solutions today charge from 0.0% to 0.3%.  Schwab, Betterment, and Vanguard even offer a full financial advisor to go along with the automated service.  So, for the young client, you’re looking to be paying four times the amount with Creative Planning that you would pay at one of those shops.  (My firm Cambria, as most already know, has an automated solution that we charge 0% for but does not include any planning.)  Robbins himself actually states on his podcast a few times that you shouldn’t be paying more than 1% “all in”.  Presumably this includes fund fees which would push his overall cost to about 1.4%

So, summary?  Buy the book, and feed some homeless people.  Take lots of Tony’s advice to heart, as for the most it is very good advice.  Just consider an alternate solution, as his advice doesn’t come cheap…