By 2025, the fintech industry’s estimated global market
value is on track to exceed $300 billion. In fact, fintech has earned its share
of press, frequently focused on topics like cryptocurrency and digital-only
banks. However, fintech stretches into many other areas, including retirement
I believe retirement investing has been ripe for disruption
for a long time. That’s not a knock on stocks, bonds, equities, traditional
currencies, or financial advisors and wealth managers. It’s just an honest
assessment based on the different needs of yesterday’s investors versus
How have investors changed? Just a generation ago, most
people were satisfied to leave alternative retirement investments to the
wealthiest individuals. The average person might have dreamed about investing
in fine wine or commercial real estate someday, but he or she knew it wasn’t
possible without joining the high-net-worth club.
Now, fintech is slowly leveling the playing field. The
average person can own and trade Ethereum, fine art or non-fungible tokens. All
it takes is the right type of platform and a surprisingly modest amount of
money. According to research from alternative investment firm Rocket Dollar,
nearly two-thirds of Americans would earmark more funds toward retirement—if
they felt they had more choices. Fintech is making those choices accessible,
understandable, and attractive.
In the book “The Disruptive Impact of FinTech on Retirement
Systems,” editors Julie Agnew and Olivia S. Mitchell note that retirement is
undergoing a revolution. They add that the revolution can be successful. The
key to success, according to Agnew and Mitchell, lies in a thoughtful
So far, the evolution of retirement-based fintech startups
has been a bit more sudden than Agnew and Mitchell might recommend. Despite
this, many investors are coming along for the ride. What they’re finding is
that fintech can be a gateway to alternative retirement investments in several
1. FINTECH IS DEMOCRATIZING STOCK INVESTING
The democratization of retirement investing has happened
with a bit of a jolt. Investment sites like Robinhood instantly removed
barriers to entry for countless people. Those were people once locked out of
being able to buy or sell stocks easily. No more. Now, a wider net of users can
confidently try to grow their wealth by investing in stocks that align with
How do app trading platforms such as Robinhood, Acorns, and
Betterment work from the back end? At their core, they’re all basically
discount brokerages. However, each of them has created user-friendly
experiences that empower individual traders. As a result, those traders can
feel more comfortable moving their money around in real time and seeing it
2. FINTECH IS DRIVING CRYPTOCURRENCY EDUCATION
Bitcoin, Ethereum, and other cryptocurrencies have made
their way into everyday conversation—and everyday investments, too. Where did
the peace of mind and confidence surrounding crypto come from? Fintech
founders, as well as gamified approaches that make learning about crypto more
enjoyable and less complex.
Cryptocurrency-focused fintech tools can help demystify the
crypto buying and selling process. By offering secure digital spaces where
consumers can purchase cryptocurrency with ease, fintech businesses can enable
people to creatively flesh out their retirement accounts. Best of all, they can
do it with a higher sense of financial literacy.
3. FINTECH IS OPENING DOORS TO REAL ESTATE INVESTING
One thing fintech does exceptionally well is make
crowdfunding feel natural and rewarding. Consequently, many fintech companies
are helping investors from all backgrounds put their funds toward commercial
real estate purchases.
Being able to buy a percentage of a property at a place such
as RealtyMogul enables less risky real estate investing. Plus, though the real
estate market can fluctuate, it has a history of stabilizing over time.
Therefore, investing long-term in professionally managed, pre-vetted properties
can pay off.
4. FINTECH HAS INTRODUCED AND NORMALIZED THE ROBO-ADVISOR
Only a few years ago, it would have sounded far-fetched to
imagine that people would trust their retirement portfolios to machines. Not
now. AI-driven robo-advisors are rapidly changing the retirement landscape.
Their role is to give financial advice tailored to an individual’s tastes. This
includes alternative investments.
Consider Wealthfront, a leading robo-advisor. Wealthfront
presents a buffet of a la carte investments to choose from. Cannabis. Clean
energy. The automated investment service firm makes investing seem more
personalized, even as it’s taken the human out of the equation.
The digital age has influenced every industry and especially
finance. With fintech, alternative retirement investors are finally getting the
chance to explore investment opportunities that weren’t available until
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