It’s also of tremendous value to the consumer, because it allows their advisor to look at everything they have, so that the advice we give the client is more comprehensive and more coordinated, so that we see everything the client owns without having to rely on the client remembering to tell us, or the client failing to give us accurate or timely data.
We’re able to look at it along with the client to give them advice for accounts that they don’t maintain with us, such as a bank CD that might be maturing, or the interest rate on a bond that isn't as good as what's available elsewhere.
ETF.com: What do you see as the most innovative or useful fintech developments over the last three or four years? Because it’s been moving fast.
Edelman: It is. The technological development is occurring at an exponential rate, which is the basis of my book, “The Truth About Your Future.” And there are two primary innovations under development that are going to radically alter financial planning and the typical advisor’s practice.
The first is health sciences. Medical innovation is advancing at an exponential rate. And by 2030, many technologists anticipate the vast majority of disease will be cured. And life expectancy will be dramatically increased. Aging itself, they have discovered, is a disease. And it too will be cured, along with heart disease, respiratory illness, obesity, cancer, diabetes.
These will all go away, which means that financial planners who are telling their clients that they’ll retire at 65 and die at 95 are giving advice that is severely outdated and fatally flawed.
So the financial planning models have to be updated to reflect the likelihood that a client will live to 110 or 120 and will maintain earned income—will continue to work into their 90s and 100s. It’s a completely changed paradigm from what planners have historically told their client.
The second, specifically in the fintech world, is the blockchain. Many technologists tell me the blockchain is the most important innovation in human history. They equate it in terms of importance to fire, the wheel and the internet.
The typical financial advisor has either never heard of the blockchain or is unable to describe it, meaning that advisors today are as clueless as their clients. And that’s not a healthy situation for the client. The blockchain is the underlying technology that was used to develop bitcoin, the world’s first digital currency.
Today there are more than 800 digital currencies. Bitcoin and the blockchain have gone from a sideshow of little credibility to now mainstream evaluation, where every leading bank and insurance company and government on the planet are engaged in extensive research and development, recognizing that blockchain has the potential to completely transform the global financial system.