As we take this issue to print, many of our readers are working with their accountants and financial advisors to wrap up their filings for tax season. It’s not much fun for most of us—more of a necessary evil. Likewise, financial literacy can be somewhat of a “dry” topic, but it’s too important not to study and engage with.
Like most industries, the financial services sector has changed dramatically in recent years, driven primarily by advances in technology. Now we have another new buzzword—fintech—which appears to be popping up all over the place. On its face, “financial technology” would seem simple enough to comprehend, but when you get down to the specifics, it can be rather confusing (to the layperson).
In March 2014, we published an article about Bitcoin, the digital currency that was beginning to make waves, heralding an era when physical dollars might cease to exist. Three years later, those dollars are still in our wallets, though Bitcoin’s value continues to rise—surpassing the price of gold for the first time last month.
Attention has turned to the software underlying Bitcoin, known as the “blockchain,” which demonstrates applications far beyond currency. Click here for a brief overview of the potential implications of this and other disruptive technologies for banks, investment firms, insurance companies, government entities and more.
But no “robo-advisors” for me, please… I still prefer my financial advisors in human form, and I suspect most of you feel the same. In practice, they are less likely to be replaced by robo-advisors, than augmented by them—offering bigger and better data, more sophisticated analytics and cutting-edge tools, just like the technologies that preceded them.
Meanwhile, I’ve watched as my nearly 90-year-old mother struggles to keep up with changes in Medicare and Medicaid, dwindling retirement funds, increased healthcare and prescription drug costs, and limited caregiving options. This convoluted and expensive system feels like it’s near a breaking point.
Uncertainty in Washington, coupled with our state’s financial crisis, continues to leave us shaking our heads in bewilderment. With so many decisions out of our control—and with politics as broken as the healthcare and tax systems Congress is attempting to fix—how do we plan responsibly for the future?
That is the million-dollar question. And that is why trust—in our banks, economic advisors and financial institutions—is so vital. In this age of continuous change, we need a solid foundation, a firm footing in which we can have confidence. iBi