Last month, we learnt about the career opportunities for young readers in the areas of financial products distribution and financial advisory services.This week we will see how technology and finance are coming together to provide even more interesting opportunities.
These days, it is difficult to get through your day without being bombarded with buzz words such as ‘artificial intelligence’, ‘machine learning’ and so on. While there is a high degree of hype around these terms, we are also seeing an extraordinary level of creativity and market impact on their account. This is best exemplified by robot advisors. They take the humans out of the financial advisory business. Last time, we learnt how there are significant opportunities in becoming a registered investment advisor (RIA).
A RIA advises people on how to invest their money and charges a fee for his services. The thing is, good RIAs are in short supply. Things get bad when you zoom in to small towns, as it is difficult to find quality financial advisors in such areas. So, this is a great career opportunity for young people like you, to become that high quality financial advisor in your town or locality. But, what if you are living in such a place and are looking to invest your hard earned money? Even in big cities, if you are living in the outskirts of the city such as Vandalur in Chennai or Whitefield in Bengaluru, it is likely that your friendly neighbourhood financial advisor is not savvy enough to give you sound advice. This is a problem that many face. As cities and towns expand, new localities spring up and get populated quickly. Often, such places lack good schools and hospitals. They also usually lack good financial advisors, accountants, lawyers, and other professional service providers.
The way out
There are entrepreneurs looking to solve this problem using technology. The robot advisor platform uses technology to give you financial solutions, thereby eliminating your dependence on local financial advisors. Companies such as Betterment and Wealthfront in the U.S. are leading the pack in terms of ideation and innovation. You can now get your money managed by these robot advisor platforms pretty efficiently, for a fraction of the commission charged by your local agent/distributor/advisor. These platforms use sophisticated algorithms and machine learning to craft personalised financial solutions for you. As you move from your first job, to marriage, to retirement, your portfolio will be automatically rebalanced. How cool is that?
In the past, you would need to be a high networth individual (HNI) to be able to afford high quality financial advice. Today, for a fraction of that fee, you get decent financial advice from the robot advisory platforms. Closer home, you can check out platforms such as ArthaYantra and ScripBox, to get an idea of what is available in India.
This is a good opportunity for some of you to team up with your classmates who are in to AI/machine learning to build a robot financial advisory business. If you are not that adventurous, you can always use the robot advisory platforms available in India to get your financial house in order. You are no longer hamstrung by lack of quality or expensive financial advice. Long live the machines.
The writer is an alumnus of IIM Bangalore and co-founder, Money Wizards. chari.venkatesh@gmail.com
