No avoiding the technologically driven shared economy
The financial advisory world has generally embraced technological change, but will it embrace the shared economy start-ups -- think Airbnb, TaskRabbit and Uber -- that have been made possible by technological change?
Every industry must reckon with the possibility -- even if it now seems unfathomable -- that a shared economy entrepreneurial force may disrupt their way of doing business, according to founders of such innovative companies.
Debbie Wosskow recalls when she was seeking financing for Love Home Swap, a collaborative consumptive company she set up in 2009, that allows homeowners to swap, rent or use points to stay in more than 55,000 properties in 160 countries worldwide.
“I got told to roundly piss off by a lot of venture capitalists who said that nobody would stay in other people’s homes,” says Wosskow, chief executive of LoveHome.
She manages a staff of 40 and has secured the financing to grow worldwide.
Last year, the United Kingdom government commissioned Wosskow to sit on a panel to review what potential the shared economy has for other industries.
She identifies three technological trends that have contributed to the growth of the shared economy: online applications that allow for rankings, ease of sending and receiving digital messages from anywhere, and trusted online payment gateways.
All those tech advancements factor into the potential delivery of financial advisory services.
It would be a mistake to dismiss the possibility of shared economy concepts migrating to the financial advisory business, says Cheryl R. Holland, the founder of Abacus Planning Group Inc. in Columbia, S.C.
They already have in some respects, she says.
“The financial services industry has always been a part of the sharing economy,” Holland says.
“When I began my career, I did a financial plan for several artists who gave me paintings in lieu of the fee,” she says. “I am unclear what types of innovation might arise via technology and the sharing economy, but that outcome seems logical and viable to me especially among younger planners.”
In the immediate future, financial planners will do well to stay abreast of the shared economy to help their clients.
Joseph F. Coughlin, the director of the Massachusetts Institute of Technology AgeLab in Cambridge, Mass., thinks that the shared economy has the capability to transform retirements.
“What we own may become less important than being able to afford certain experience,” he wrote recently in an article for Ameriprise Financial’s website. “Physical assets take second stage to services and as a result, cash flow may become more important for future retirees.”
So paying attention to the shared economy’s growth and potential only makes sense for financial advisors.
“We don’t know how the long tail of innovation will disrupt other industries,” Wosskow says.
Miriam Rozen writes about the financial advisory industry and is a staff reporter for Texas Lawyer.
This story is part of a 30-day series on leading tech trends for advisors.