This week's magazine contains all the usual misery. You canread about the dismal state of British politics, getan idea of just how much money Tony Blair is making out of being our ex-PM, and enhance your fears about how drones might be spying on you (and learn how to make money out of it).
But I have good news too. I think we are about to enter a golden age for investors. I don't say that because stockmarkets are cheap and we'll all be rich in a couple of years (it probably isn't so for read Bill Bonner's take on the matter). I say it because I think the financial industry is on the edge of quite significant change.
I went this week to the National Association of Pension Funds conference (I do this kind of thing purely so you don't have to). There I listened to James Wales, one of the co-founders of Wikipedia.
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He pointed out just how quickly technological change can knock over confident incumbents. The Encyclopedia Britannica and its German equivalent, Brockhaus, weren't taken out over a generation by Wikipedia they were irrelevant within "less than ten years". Ask a teenager today what an encyclopedia is, and they'll answer: "is it a bit like Wikipedia?"
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This is a story our big fund managers should consider, because turbo-charged change is coming for them too. The threats to their businesses are many.
There is the fast-falling price of passive investment: this week iShares slashed the price on its flagship FTSE 100 tracker from 0.4% to 0.07%. That's proper cheap. There is the rise of smart beta (simple strategy-specific funds run by robots).
There are the new non-conventional rivals what Americans call robo-advisers such as Nutmeg in the UK, and new-launch funds (such as the Patient Capital Trust we covered last week), experimenting with novel charging methods.
But most importantly there is the desire for, and easy access to, financial data. In the past, most people haven't paid much attention to their pensions during the accumulation years: they've paid in and hoped for the best. On retirement they've engaged for a day, bought an annuity and left it at that.
That lack of long-term interest has given the industry licence mostly to provide mildly unsuitable products at generally poor prices. Now when people retire, the management and price of the products they buy are going to matter not just on day one, but every day for 20-30 years.
Retired tech-savvy people will engage; they'll make the industry start working for them. That's going to mean cheap products; different products (ie, pensioners without annuities need ones geared to withdrawals, not contributions); and I hope some interesting new entrants.
Ask a teenager what fund manager Fidelity does in ten years and she might just say "is it a bit like Facebook Finance?"
