Back in 2006 – seemingly a century ago in financial services years – NYU economist Nouriel Roubini gave a speech to his fellow economists at the International Monetary Fund outlining the details of the recession that was to come. Roubini’s prescient call earned him global accolades and the ominous nickname “Dr. Doom.”
Over a decade later, Roubini is reprising his role calling market tops, claiming cryptocurrency Bitcoin is a “gigantic speculative bubble.” And just last week, he was bearish on blockchain, the technology underpinning bitcoin, writing on the Project Syndicate website that it is “ranked close to the peak of the hype cycle of technologies with inflated expectations.” Further, he states that “there are still massive obstacles standing in [blockchain’s] way, even if it has more potential than cryptocurrencies.”
Just as Professor Roubini’s calls for a double-dip recession in the US failed to play out, we feel the esteemed academic’s outlook is at best short-sighted, and we respectfully disagree with it.
Last month, I argued that asset management digital marketing is in “batting practice” in response to the theoretical question “what inning are we in?” I still feel that way, and blockchain is a part of it.
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While Roubini argues that bitcoin is the one commercial application of distributed ledger with mass appeal, this type of technology is already transforming the real estate business. Closer to Harvest’s universe of financial services, stock exchanges are finding an application with equity trade settlement, which will ultimately accrue to the benefit of end investors in the form of lower fees.
But if I had one prediction for how this technology will affect our network of peers in 2018, it will be financial advisors’ adaptation to the Fiduciary Rule. (Over 70,000 financial advisors are now active on Harvest each month.)
Though its rollout has been delayed, the Fiduciary Rule requires financial advisors to act in the best interest of their clients when it comes to their retirement savings, and potentially beyond that. Doing right by their clients requires that advisors have the most accurate data on clients’ life circumstances to build the most optimal financial plan – and the ability to track changes in near real-time.
As more wealth management clients demand digital interfaces to supplement to their personal relationships with their advisors, blockchain’s unmatched data integrity will confirm that advisors have the best possible information to do their jobs – and be compliant with regulations.
Every breakthrough technology has its detractors before it gains widespread adoption, and this is no different. We at Harvest are early adopters of blockchain in our own proprietary technology, and we expect our peers will do the same.
For doomsayers, a broken clock might be right twice a day, but blockchain is too strong a force to ever stop ticking.