ebook: financial advice with robo advisors (english)

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Post on 08-Jan-2017



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  • FINTECH SERIE BY innovation edge




    How should youmanage yourfortune?

    01 Startups toconquer Wall Street

    02 Could we haverobots insteadfinancial advisor?


    04 05 INF0GRAPHICHow they workrobo-advisors?


    Jos Diego Alarcn (Serfiex)

  • Startupsto conquerWall Street


    A walkthrough of the fintech trends looking

    to revolutionize financial advice ( ).

    SERIE FINTECH AUGUST 2015 www.centrodeinnovacionbbva.com/en

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  • They are young and seek to

    change the traditional model

    of the financial world.

    Storming Wall Street. A dozen

    startups are looking to

    compete with long-standing

    companies or fill the void of

    the traditional models. A

    pioneer in the United States,

    Wealthfront has moved more

    than $2 billion in managed

    assets in only three years, with

    an average shareholding per

    customer of about $115,000.

    Its competitor, Betterment,

    nears $1.5 billion in assets.

    These figures are a far cry

    from the large banks Bank of

    America is close to $1 trillion

    although they are attractive to

    young people ( ). Dubbed

    the "Henrys" (high earning, not

    rich yet) by Goldman Sachs,

    these customers do not plan to

    go to a bank branch in their

    lives and want to move their

    money with just a click. The

    study by Accenture and

    Partnership Fund for New York

    City highlights that investment

    in Financial technology has

    tripled from 2013 to 2014.

    Fintech companies are

    characterized by removing or

    replacing banks and financial

    institutions as intermediaries,

    promoting cooperation or

    establishing new schemes for

    more accessible commissions.

    SERIE FINTECH AUGUST 2015 www.centrodeinnovacionbbva.com/en


  • Fintech trends that entice

    young customers

    Digital Crowfunding: Hybrid between Blockchain

    technology database that

    records transactions with

    cryptocurrencies and, as the

    BBVA Blockchain technology:

    The ultimate Disruption in The

    Financial System report

    explains, it removes the need

    for intermediaries and

    significantly reduces costs for

    banks, and crowdfunding.

    Companies are making offers of

    digital stocks. The US company

    Ethereum stands out as it

    allows developers to create

    distributed applications, define

    custom currencies, contracts

    and even intelligent

    crowdfunding platforms

    (collective microfinance). To be

    able to run programs in the

    network, you need to have a

    certain amount of Ether, the

    platform's "currency". Another

    platform is the European

    Crowdcube , which allows you

    to create a "portfolio of startups"

    with a minimum value of ten

    euros, and then keep track of

    what happens to each of them.

    As explained on its website,

    "many investors contribute

    small or large amounts of

    money to entrepreneurs and

    businessmen to carry out their

    project. In exchange, investors

    receive shares in the company

    and become its partners

    accompanying the company in

    its future growth".

    SERIE FINTECH AUGUST 2015 www.centrodeinnovacionbbva.com/en


  • Payment services with

    low-cost investmentsThe star of services-based

    investment is Robinhood, the

    broker backed by Silicon Valley

    investors, including Google.

    The broker with no

    commissions or spreads aims to

    democratize trading. It is very

    easy to use and you don't need

    to have a minimum capital to

    open an account. Instead of

    charging fees, Robin Hood

    charges interest on the use of

    margins and charges for the

    use of "leveraging" (increasing a

    company's level of debt).

    Robinhood allows developers to

    create trading applications such

    as graphics, signals or

    fundamental analysis. Payment

    products based on services to

    attract the traders who are

    most experienced with Robin


    Robo advisor ( )As indicated above,

    Wealthfront and Betterment

    stand out in these types of

    services that create automated

    low-cost portfolios based on

    our profile, by eliminating the

    commissions of a managed

    portfolio. A model that prevails

    in North America and is

    coming to Europe. In 2014,

    about 73,000 customers

    contracted such services in the

    United States.

    Some trends that confirm that

    the growth of startups

    continues to increase: In 2014

    the assets of startups

    dedicated to consulting in the

    US reached $5 billion. And

    forecasts suggest that this

    figure will have tripled to

    exceed $15 billion by the end

    of this year.

    SERIE FINTECH AUGUST 2015 www.centrodeinnovacionbbva.com/en

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  • The rise of so-called robo-advisors is changing the

    traditional financial management landscape in the US

    and they are slowly being incorporated in Europe. ( )

    Could we haverobots instead of financial advisors?


    SERIE FINTECH AUGUST 2015 www.centrodeinnovacionbbva.com/en

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  • Could a robot manage my

    money? Without a financial

    advisor acting as an

    intermediary? Little by little so-

    called robo-advisors are

    changing the way money is

    being moved in the US and

    are beginning to reach

    Europe. This model means

    customers do not need

    financial advisors. They just

    have to turn on their

    computer and fill out a

    questionnaire. Customers

    report their risk tolerance,

    goals and investment and

    their money is managed

    automatically ( ).

    A model that, according to the

    consultant from GVC Gaesco

    Albert Enguix, has

    experienced "spectacular