1 big thing: Mobile banking heats up

bringing their average return on assets to an extremely healthy 1.35%. That’s up from 0.97% in 2017. With banking so profitable, a lot of new players are looking to get in on the game, or to increase their market share.

The big picture: In a tech-obsessed world, a broad range of institutions have decided that the future of banking lies in apps. The logic is simple: Increasingly, Americans want to bank on their phones, rather than in expensive-to-maintain branches, so banks should give them what they want.

• Goldman Sachs, which already has an online savings account called Marcus and a cash-management app called Clarity, is reportedly going to launch a new card designed for iPhonesin particular. Expect something beautiful, designed by Apple.
• Aspiration, an eco-friendly mobile-first bank, has relaunched its product with a slew of attractive features including cash back on debit card purchases, zero ATM fees worldwide, and 2% interest on deposits.
• Varooffers a savings account paying as much as 2.8% to customers who use its checking product.
• Other neobanks including Chime, Acorns, and Simpleare also competing hard; even JPMorgan Chase has one, called Finn.
• Banks, prepaid debit cards, and brokerages are all blurring into each other, offering much the same products. Look at SoFi Money, for example, or at the new Wealthfront savingsproduct, which promisesto support bill payment soon. Expect it to have a debit card, too.

The bottom line: None of these products are particularly revolutionary, except insofar as their users tend not to hate them. If and when winners start to emerge, expect them to be acquired by the major banks, at which point Actually Pleasant Banking might start to become a mass-market phenomenon.

 
Bonus: The appeal of digital-only banks

Most mobile-first banks target millennial customers, on the grounds that they are less wedded to their existing banks and are more likely to constantly be on their phones. But a new survey from Marqeta, a fintech startup backed by Goldman Sachs and Visa, shows that Gen Xers are just as likely to have moved to such a bank, and are just as likely to want to move.

 
2.How to make money the old-fashioned way

Ken Fisher doesn’t care about millennials, or apps, or disrupting anything; he’s in all respects the epitome of the kind of investment manager that younger, cooler startups are attempting to disrupt. So far, there’s no sign that they’ve made so much as a dent in his revenues.

• Fisher’s firm, Fisher Investments, now manages $100 billion.RIABiz, an investment-advisory trade publication, estimates that he’s generating $1 billion a year in revenues.
• In a worldwhere Fidelity is offering mutual funds with zero expense ratio and no minimum investment, Fisher Investments turns away potential customers with less than $500,000 to invest, and charges an eye-popping 1.5% on the first $475,000 of that amount. Those obstacles haven’t stopped the money from pouring in: Fisher’s assets under management continued to grow in 2018, even as the broad market saw a substantial decline.

Fisher’s comparative advantage is in sales and marketing. His advertising budget has been so large for so long that his name recognition is super-high; he is also happy to use his own billionaire status as a way to attract clients. His product is designed to appeal to older investors, often retirees, who like to talk to a fellow human about their finances, and who don’t mind paying more than 1% of their assets every year in order to be able to do so.

• By the numbers:Every client with more than $10 million under management is generating a six-figure annual revenue for Fisher Investments. That kind of money buys a lot of TV ads.

The bottom line: It’s going to be decades before millennials have the kind of wealth that Fisher’s clients enjoy, which means that Fisher Investments has the luxury of time on its side. Meanwhile, the venture capitalists who have invested in smaller shops are not just chasing younger, poorer investors; they’re also much less patient. For the time being, then, the dinosaurs still have the advantage.

Πηγή: axios.com