The future of financial planning?

The future of financial planning?

The future of financial planning? Personal Capital Corp, the intriguing new company started up by a former Paypal CEO, has just released an app for Android wearable devices that purports to represent the future of the investment advisory industry.  

The new app runs on the LG and Samsung Gear Live smart watches. A "You Index" pings at market close showing the client how their portfolio finished against the S&P 500 index as well as detailed info about the top five gainers and losers in the portfolio.

Is this a scary case of information-overload, or just the inevitable direction for the advisory industry? If the corporate hype pumped out by Personal Capital Corp., is to be believed, this is the future.

Personal Capital Corp. (PCC) has been attracting more than a bit of interest of late. The company is the brainchild and personal mission of former Paypal exec and Intuit CEO, Bill Harris, who has been sounded downright evangelical about his new company. He calls the organization “the culmination” of his career and is promising to shake-up the advisory business with a new accent on technology and live advisors.

So-called "robo-advisory" services that use computer-generated algorithms to invest client money have popped up over the last couple of years. PCC uses some of these same technologies, but also incorporates live advisors into the business to deliver a new model for the advisor industry. The company's new hires sound like disciples. 

A blog from one of the company's advisors explains the interest. The young advisor explains he was "fed up pushing company mutual funds and whichever new product an insurance salesman brought in to sell to clients." After leaving the industry in 2011 the advisor came back to the industry as he came to understand the tech-based business case. 

“Most traditional advisors have so many responsibilities it is often hard to be exceptional at all of them. They have to find clients, gather information and prepare recommendations, then assist in filling out any documentation needed to open accounts and move assets, choose the proper investments and, to a degree, manually oversee the investments, and finally work on everyday planning issues.” The advisor explains that the new company, “is moving this industry forward in a big way by working as a team. Clients have two advisors, and entire operations team that focuses on getting accounts opened and assets transferred over as seamlessly as possible for the client, and our investment committee that oversees the investment management duties.” That is, PCC is the future. Making sure no one misses the point about the profound nature of the shift PCC represents, the advisor goes on to compare Harris and PCC to the rise of Schwab a generation ago. “Thirty years ago Charles Schwab changed the industry introducing the discount model, there is no reason we can't change the industry again for the better with our technology-assisted financial advisory service," he says.