Forget Commoditized Investment Advice, Says United Capital’s Duran

Examples he gave were buying music on CDs form a store, where "two of the songs would be good and the rest would be awful, but we bought the entire CD. We would never go back to that. Or the travel agent; after Expedia, I'll never again do business with my very nice, very helpful, but more expensive travel agent. We won't ever pay late fees again at a video store."

Apple killed the music store, he noted, and Expedia killed the travel agent business. One thing companies like these have in common is "a democratization of knowledge and complete transparency, something our industry has been secretive about, especially when it comes to what we charge, but no longer."

Companies like Apple and Expedia were the first to recognize the importance of this openness and take it to the marketplace, one reason they're so successful.

"The website Betterment.com will give someone with a $100,000 account an ETF wrap, for which they'll provide rebalancing and they'll send statements," Duran warned. "They'll do it all for 10 basis points."

Employing another mass market example to make his point, he related that when Starbucks first started, competitors weren't concerned, noting the quality of their coffee and their lower prices. The problem with the thinking is that Starbucks wasn't selling coffee; they were selling the experience.

"How well you sell the experience determines what you charge, especially in commoditized businesses," Duran concluded." If there is one thing you take away from this session, it's to determine what business you are in. If you're in the investment management business and rebalancing client accounts, someone else will do that for 10 basis points."