In this article we’re going to discuss ways that blockchain and cryptocurrencies can help society and also financial planners in particular. Financial planners are oriented toward finance, of course; fintech (financial technology) is rapidly becoming a dominant part of planning.

Blockchain is basically an advanced spreadsheet spread across computers around the world. This network updates spreadsheets at regular intervals and people can continue to generate transactions that are verified by the network.

Information codified this way ensures the database isn’t backed up at just one location but is available at hundreds and thousands of locations and thus is easily verifiable.

This automatically instills trust in the system. People eventually could do without many of the traditional elements of third party verification, including perhaps contract lawyers, certain brokers and other kinds of intermediaries.

 “I think it is definitely evolving and ultimately the disruption is going to be explosive, certainly for an early adopter,” says Melissa Joy at the Center for Financial Planning. "We’re not early adopters but certainly we can see heading in this direction.”

Some of the following is taken from an FPSB study last year that provided comprehensive insights into how planners felt about planning in the future. While many parts of the financial industry have moved ahead rapidly with new technology, financial planning has moved more slowly.

For one thing, planning is advice-based so people don’t have to move as quickly as others do in more transaction-oriented occupations. Also, payment in many cases is at least partially dependent on advice, so planners aren’t losing money by moving more slowly.

Over time, there will be radical shifts and planners who want to keep up with the industry will make the effort to implement and use what’s coming available sooner rather than later.  

In some cases, the new technology will help younger people as well as people who are not so well off, but financial planners have mixed feelings about a mass-market approach. It may, they think, create lower margins and thus less profit. Others believe that cost savings will overcome lower costs in aggregated.

“We do need to adopt new technologies, especially when they become more popular,” Joy said. “Like other advisors, we are cautious about what we do, but I can see some younger advisors moving in this direction sooner rather than later.”

First « 1 2 3 4 5 » Next