Hi Jonathan, thanks for your views. The previous book you might have read “Probabilistic Scenario Optimisation” is fairly quantitative and sets the grounds for using exhaustive enumeration techniques to make portfolio construction and simulation in a way that can solve common problems of MPT and it allows to create graphical representations for Goal Based Investing. There is a need to make sure we are told transparently the risks and rewards over time when it comes to investing, net of costs (don’t even think most Rondo-Advisors 1.0 do it) as they still don’t). This is one of the scopes of new market regulation post-financial crisis (which, by the way, opens for probabilistic frameworks in Europe). “FinTech Innovation” wants instead to be way more narrative and cut the pis in between (not too tech, not to quantitative) and explain the fact that innovation in wealth management is primarily a problem of business model more than technology “per se” or social media habits. Regulation is forcing firms to transform from “packaging of products” (hence marketing dominated) into “packaging advice” (hence experience dominated) as the asymmetry of information gets realigned and compliance costs soar. But it is difficult to see how a Robo-Advisor 1.0 could be useful in this journey because changing what you sell and how you get compensated is not an easy task and what they do today is way below standards. As such, TECH innovation as we see today in Robo-Advisors 1.0 is not enough (a sexy UX can bring some customers but wont make your lunch … hence banks are keeping at bay). We are not discussing if digital is good or bad, but what digital means in financial services. The time of testosterone drive marketing is over (because or regulations, not because of Millennials as Millennials would grow as greedy as their parents when time comes to their investing). And smart consumer branding is not enough when it comes to investing, because investing and consuming are not equal (behavioural finance), reward and pain are felt differently (time matter a lot, as it brings uncertainties to financial return but not to wearing a gucci bag reward), hence regulation is needed (because it i not easy to say if we pay the right money for the right value in banking). Therefore, to make best usage of new digital experiences “FIN Innovation” is also required (Goal Based Investing on graphical representations and intuitive narratives) to create BETTER advice, not only CHEAPER advice. As ever in life, Rome was not build in a day but on layers to be the charming experience we can enjoy today, with all its beauties and shadows. This book can’t compare, buy I stay course on its strengths. Would be truly nice to discuss more and learn further about your views, maybe a call?
Just a friendly note about setting up a company: PSO is itself a piece of innovation in finance, no digital design compares, and sits at the core of the work of CAPITECTS GmbH, the joint-venture newco I created in Germany in 2008 when I moved there from Milan as managing director and employee #1. Is till remember the day I went to the Notary with co-partner Jochen and had to get all those German translations. CAPITECTS started with a business contract and pipeline from banking partner (pipeline first, product second), never lost a euro until GmbH existed, gave work to 20 people in 4 years who successfully entered the IBM family when IBM bought funding partner Algorithmics in 2012 and all subsidiaries. For us, it was a success, but I know I was not a successful as an entrepreneur: I didn’t become a unicorn They told me I am an acqui-hire (??) whatever that means. Yet, we certainly convene that in 2006-2008 not many influencers we follow today had a clue about the need to personalise personal finance by mixing innovation in FINance and TECHnology, create added value, operate on portfolios instead of retrocession-driven products. All the best and friendly.