America is moving from a "brute force" economy to a "brain force" economy, and financial advisors are at the forefront of the shift. So says "Future Shock" author Alvin Toffler, who decades ago forecast the digital revolution, the decline of the nuclear family and the crack-up of the Soviet Union.
"Knowledge is becoming the central resource of the economy. Financial advisors are selling knowledge, which is intangible. We're moving toward a higher level of intangibility -- investing in companies, like Google, that are entirely intangible. Most jobs will be based on the creation or manipulation of intangibles. Since the essence of the advisor's job is intangible, they're in the right place!" says Toffler, 77, in an interview.
His newest book is Revolutionary Wealth. A collaboration, like previous works, with wife Heidi Toffler, it forecasts the ways in which tomorrow's wealth will be created and how the new economy is set to explode.
With FAs offering clients even more services beyond the basics, job opportunities will widen, predicts Toffler. "We'll expand the concept of finance, and that will require more people" to do the work.
In a 1964 Horizon article, he coined the term, "future shock." Toffler's theory was that the future, barreling at us at high speed, could disorient us or render decision-making difficult. Six years later, he developed the concept into what would become a seminal bestseller.
"The Third Wave," published by the Tofflers in 1980, theorized about the rise of the "electronic cottage," where work and production would return to the home through use of computers and other high-tech gear. The new civilization they forecast represented a Third Wave of change rising from a waning Second Wave industrial era, preceded by a First Wave set in motion by the agricultural revolution.
Speaking by phone from his own electronic cottage near the University of California at Los Angeles, the famed writer has no shortage of enthusiasm about most new patterns of change. "Yes, there's a long list of threats and dangers," he says. "But on the other hand, there are many tremendously good things that can happen -- like the fantastic developments taking place in medicine and science that will make it possible for people to lead longer, better lives. I remain stubbornly optimistic about a lot of things."
In financial services, Toffler sees FAs encountering "a further onslaught of innovation," resulting from, for example, creation of a "shadowy" non-money, or "para-currency," economy that he predicts will exist alongside the money economy. "It will be a new way of measuring the economy."
Further, "prosuming" -- consumers consuming what they themselves produce -- is about to blast off, bringing with it radical changes. Then there's outsourcing work to the customer -- already in progress -- such as self-service supermarket checkout and ATMs subbing for bank tellers. This means, says Toffler, that "you as an individual are insourcing while companies are externalizing labor costs. It may not necessarily be all bad.
"Standard economic relationships are being stood on their heads," he continues. "Buying a washing machine isn't so much consuming but making a capital investment that increases your capability to substitute non-monetary activity for monetary activity. That is, I'm doing it myself rather than buying it from the outside. It's increasing prosumer output."
As for para-currencies, the author cites experiments in Florida and New Zealand that pay folks "service credits" for performing tasks. "If I take my neighbor to the doctor, I get two credits added to my account. They're banked. Then when I need help, I can draw on that account and have somebody assist me." This sort of trade will create new functions for financial intermediaries, he predicts.
Born and bred in Brooklyn, New York, Toffler saw his own future in becoming a writer. Upon their graduation from New York University, he and Heidi moved to the Midwest to experience "real life" because, says Toffler, he lacked early family "drama" thought to inspire compelling prose. In Ohio, the pair worked on factory assembly lines and helped organize unions.
The futurist's first writing job was on a trade magazine about welding. After a few months, he moved over to a newspaper published by a printers' union, then became White House correspondent for a Pennsylvania daily. After that, he was appointed a Fortune associate editor, writing first a labor column, then covering business and management.
Wed for 56 years, the Tofflers "fight about everything," says Alvin. "But we learn from the process." In their work relationship, he does the writing, the "wonderfully feisty" Heidi "tears things apart. She's saved me a million times from going out on a limb and saying things that were too unlikely."
One area on which the couple has always agreed, though, is their personal investment philosophy: "minimal risk, minimal required attention -- because," says Toffler, "attention is valuable, and unlike knowledge, it's limited."
Author, with Heidi Toffler, Revolutionary Wealth (Alfred A. Knopf, 2006); Future Shock and The Third Wave, among seven other books; co-founder Toffler Associates, a consulting firm to companies and governments.
What does he think the future holds? "Nobody knows the future with certainty. Anybody who says they do is a quack or a loon."
What does one world leader say about Toffler's work? "The success of Korea as an I.T. powerhouse and leader in the New Age knowledge-based economy can be attributed to the lessons I learned through [Toffler's] books." -- Kim Dae Jung, former president, South Korea