It is understandable why today’s retirement savers, whether they are millennials or baby boomers, want to have more control over their savings.
The need for trusted, yet affordable financial advice and information has never been greater. However, retirement savers are often left out of decision making, and they may feel inadequately addressed or disenfranchised. It makes sense why someone would turn to a robo-advisor and put their trust in algorithms, with the goal of making the right decisions. The question is, what technology will people turn to next?
Just as savers are excellent at adapting, financial planners will also soon have to adapt to the decentralized world of blockchain (essentially one giant, distributed ledger) and smart contracts, which will give more ownership and empowerment to the global community of retirement savers.
Community-driven platforms are changing virtually every industry, not just financial planning. And, automated platforms and community-driven platforms are not necessarily the same thing. In a community-driven platform, how good behavior and good performance are incentivized and rewarded is redefined. Simply put, the advent of blockchain will turn the financial industry into a financial community.
Insecurities everywhere are causing people to seek control over their lives across the board, from how they generate income to how they take care of their health and how they can educate themselves. For example, where the traditional career ladder has faded away, the gig economy has risen. Where university tuition costs have gone out of reach, alternative online education platforms have risen. This has all been made possible by community-driven platforms, or marketplaces that come together without middlemen, and without centralized verification.
Financial planners have been adapting to robo-advisors, and blockchain and cryptocurrency will be coming next. According to a recent survey by my company, Auctus.org, 6% of respondents said that they would consider using cryptocurrencies as an investment option for their retirement plan, and 14% said that they were unsure about the idea, but interested. In a $36 trillion global retirement assets market, these results could mean that many people are open to trying blockchain-based systems, and that the era of use of blockchain and cryptocurrency in retirement planning has only just begun.
Furthermore, according to our survey, 49% of respondents said that they did not feel like they had control over their retirement plan, and 48% of respondents said that they did not feel as if they had a transparent view of all taxes and performance results of their retirement investments.