CHICAGO -- The fintech revolution may be in full bloom, but industry analysts at the Morningstar Investment Conference say its impact may not be as immediate as anticipated.

"Fintech's effect on consumer finance is overblown," says Colin Plunkett, an equity analyst at Morningstar. "Disrupting the existing models is extremely hard to do."

He pointed to Merrill Lynch, which began to sell securities directly to investors in the 1960s, and Charles Schwab, which launched discount brokerage services in the 1970s, as previous examples of disruptive sources in financial services.

"A successful disruption in financial services takes place over a longer period of time than people think," Plunkett said. "It takes several decades, not years. Anything like Uber [in financial services] is probably unsustainable."

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ELEPHANTS IN THE ROOM
To be sure, there is no lack of trying when it comes to fintech activity.

Morningstar product manager Abby Magen estimates that venture capitalists currently have around $8 billion invested in fintech companies and that around 1,000 fintech companies have raised institutional capital ― a threefold increase in three years.

Magen is also doubtful that fintech companies like Bitcoin will impact the consumer market anytime soon. But, she cautioned, true disruptive change could come from "the elephants in the room: Amazon, Facebook and Google."

To date, regulatory, compliance and risk issues have kept the Internet giants out of financial services, Magen said. But if any one of the companies reverses course it would have the potential for "dramatic change," she predicted.

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"Disruption takes several decades, not years," says Colin Plunkett, a Morningstar equity analyst

FINTECH'S FUTURE: HEALTH, WEALTH AND MILLENNIALS
Not surprisingly, millennials offer fintech companies their best chance of success, said Adley Bowden, vice president of market analysis for Pitch Book.

"Customer acquisition strategies of fintech companies are digital and web-based, and that's where millennials are," Bowden said. "They are specifically targeting millennial 'HENRYs' ― high earners, not rich yet."

Magen thinks fintech companies may also be able to gain traction by offering sophisticated tools combining data on a client's health, health care spending and investment goals.

"Health and wealth concepts are sticky and combine goals-based personalization," she said. "All they need is the right distribution model."

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Charles Paikert

Charles Paikert

Charles Paikert is a senior editor at Financial Planning. Follow him on Twitter at @paikert.