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What's the next step in financial planning's evolution? Look to the Fitbit

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Could clients soon receive financial advice in 30-second chunks via their wristwatch?

Not quite yet, but the potential to combine digital advice and big data is spawning an evolution in personal finance management apps that could soon upend how investment advice is delivered and consumed.

Wearable devices such as the Fitbit and Apple Watch have become increasingly seamless and nonintrusive in how they collect data, says Daniel Latimore, senior vice president of Celent's banking practice and author of a new report on how personal finance management apps are evolving. Personal finance management apps, also known as PFM apps, will follow a similar development path.

"Consumers see that, and wonder, 'Why can't my finances be as easy as that? Why can I not in a seamless, non-active way get insights into my activity?"

Clients will be more deeply informed about their finances, he says, and with little effort on their part.

Microadvice, he explains, will be delivered as "hints and nudges in the moment, the right context at the right time, on what you should be doing."

"It's a microburst of education, done in digestible chunks, so the consumer feels like they are learning," Latimore adds. "As you’re waiting for the bus, its 30 seconds of insight or education based on something you've just done, or expenditure that just came in."

Though the advice may come in small pieces, the stakes for monetizing that stream will be high. Banks and wealth managers will fight to control the flow of information, Latimore says.

Plus, the advent of microadvice will impact advisers, as it will make any prospect that much more knowledgeable about their finances.

"You've got to evolve your offering to provide value to an educated consumer, and in a way that’s a lot harder," Latimore says.

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