Dating back to my college days, when I attended a financial guidance seminar for the free food – and was subsequently persuaded to invest in a fee-ridden, overly managed mutual fund (8.5% fees!!!)- I have watched the financial guidance market evolve in a way one could never imagine.
Today, with the mobile apps market exploding, it struck me that it will only be a matter of time before personal technology takes over the finance guidance ecosystem and subjects antiquated fee structures like that 8.5% to the unrelenting attack of empowered, digitally savvy consumers.
And thanks to recent innovations in web and mobile user experience, the last mile of taking control of one’s financial life is finally within reach of the average American. Today’s applications are intuitive, insightful, user-customized, and, most importantly, inexpensive to deliver, compared to the traditional guidance model available to our parents (and even then only the top 10% of our parents who had assets to support the model). Of course, we often resist what we know is best for us – we look past vegetables daily in the face of processed, food-like substitutes – and fiscal prudence is no exception. But as the barriers to entry for those Americans in search of (and an even larger group, those in need of) financial guidance falls, so will the resistance.
Simultaneously, the stakes are rising: Subjected to a two-pronged attack, Americans have never been more in debt than they are today. On one side, consumers face the temptation of synthetic credit, with home equity loans being replaced by a next generation model cooked up by entrepreneurial financial engineers. On the other side, consumers are enticed by never-before-seen big data marketing strategies that can discover a girl is pregnant before her own father.
Perhaps Marc Andreesen was correct when he predicted that software would take over the world. Certainly companies like HelloWallet will continue to innovate and provide practical, everyday financial guidance for individuals. Let’s all hope we can find a way to encourage others to seamlessly and intuitively help themselves.