Displaying items by tag: disruption

There’s a lot of talk about the disruptive power of technology, but what does that mean, exactly? See More

Harbor believes it is important to look beyond common convention and cost when considering active versus index solutions within the U.S. large cap equity space. Read More

(New York)

WealthManagement.com has run an interesting article about the role of technology in our industry. Authored by Adam Malamed, former COO of Ladenburg Thalmann, the piece discusses how technology should be employed in wealth management, and what has separated successful from unsuccessful technologies. Adam makes the point that while new technologies may be nice in themselves, they are useless unless they fulfil a real market need, which is why so many previously hyped technologies have gone bust (e.g. facial recognition tech for client pitches). Furthermore, the industry itself has been experiencing heavy margin compression, and therefore wealth tech companies need to find ways to simultaneously increase operating margins while also improving client experience. One great example the article makes is Docusign, which made document execution immensely simpler, while also reducing the costs of
processing paperwork. It is a win for clients and for firms.

FINSUM: We couldn’t agree more with this view. Change in our space is by its very nature evolutionary. Clients don’t want to take risks on new tech with capital that took them fifty years to earn, and therefore, many wealth management firms are reticent to adopt “disruptive” new technologies.

(New York)

Technology, trade wars, and social attitudes are changing the world and economy rapidly. How can investors adapt their strategies to keep up and “future proof” their portfolios? Well, Barron’s has run a piece doing just that. The stocks chosen include: Bridgestone, BNP Paribas, Lix, Dabur India, and Bharti Infratel. Bridgestone, a Japanese tire company, seems as though it would be hurt by tariffs and the rise of Uber. However, the opposite is the case, as most tires are made close to where they are sold (so no tariffs), and the rise of Uber and self-driving cars will actually increase the most important performance metric for tire companies: miles driven.

FINSUM: We wrote an article espousing tire makers a few months ago but we like the view even better now. No matter who, or what, is driving a car, rubber will still meet road, meaning tires will be in demand. Further, since parking for self-driving cars may be expensive, we can imagine fleet operators keep them driving around 24/7, increasing demand for rubber.

(New York)

The president of Wells Fargo Advisors, David Kowach, shared his views on the industry yesterday. He says that advisors must embrace technology, bridge the generation gap, and become more professional in order to thrive. While some see technologies, like robo advisors or artificial intelligence, as a threat, Kowach says these may “displace lower-value activities, but not meaningful, deep client relationships and caring”. He says it is hard to disrupt advisors who really deeply understand their clients.

FINSUM: Pretty vague and bland platitudes about wealth management, but we thought some of our readers might like to hear them. We do agree that there is a human element to the client-advisor relationship which will be hard to disrupt.