The Future of advice and distribution

Some time ago I was invited to Luxemburg for ALFI conference. More than 700 financial decision makers from US, EU, Asia and Africa were present. Back in the old days the most interesting speech was held by a CEO from one of the top 3 investment banks – but not anymore.

Now the presentation of a start-up CEO is more relevant for the audience. The audience, from which most work for top 100 investment banks, was confused about what they heard and how they could bring that to their own work, business unit and bank’s internal politics. To take this to an even higher level of confusion, let me introduce you the concept of Roboblock.

Everyone involved in this fintech hype have most likely also noticed the buzz around Blockchain and Robo-Advisory. Blockchain has the potential to revolutionise the way we distribute wealth and account transactions, like banknotes and credit cards once did. Robo-Advisory is here to stay – like it or not. There are a numbers of factors why the weight of evolution in wealth management is significant today: assets flow to passive investment products, investors pay less and less fees, and regulation increases globally, to name but a few.

Understanding Roboblock distribution system

The current system of distribution (wealth and cash) is based on central electronic ledger where banks do the checks.

Public blockchain (permissionless) is an open network that anybody can access, like the bitcoin model. The digital ledger of transactions is shared, transparent and run by all parties.

Private blockchain (permissioned) is most probably the preferred option, but not the only, for tier one investment and retail banks. It’s a closed system checking all details and controlling access by invitation only.

Roboblock is a concept where wealth and advice is distributed only between parties within the network. It is a combination of Robo-Advisory and Private Blockchain where distribution and advice are shared among invited parties. Roboblock may enable a global value chain for independent asset managers to share information and distribute advice globally among each other and with the investors invited.

“Like the internet, it’s neither intrinsically good or bad, it just is”, states Simon Taylor (co-founder and blockchain director of 11:FS) about Blockchain in the Financial Times, September 2016.