Chapter 4Social and Technology Mega Trends Shape a New Family of Taxable Investors

“Change is the process by which the future invades our lives.”

—Alvin Toffler (1928–)

Three mega trends are sweeping the world and affect the wealth management industry: money is about to change hands due to a generational shift from Baby Boomers to younger heirs, at a time when wealth is polarizing horizontally and vertically (i.e., west–east and poor–rich); regulation is getting tighter, which increases fiduciary standards and affects the incentive schemes of the intermediaries; societies and individuals are progressively becoming highly interconnected (e.g., the Internet of Things), to generate an incredible amount of data that a new set of analytics can harvest to generate powerful customer insights (e.g., cognitive computing). Robo-Advisors, Goal Based Investing, and Gamification stand at the crossroads of these powerful forces, which influence the investment behaviour of individuals and affect the way financial institutions and advisors relate and function.

4.1 Introduction

Modern economies and human society at large are facing a period of unprecedented change which can be explained by the interaction of three mega trends, affecting investors' behaviour globally, with geographical differences but virtually no borders. First of all, ownership of financial assets is polarizing in the hands of the top tier of wealthy individuals, while the US and European middle class is shrinking for the ...

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