We are not going to talk in this article about the famous investment in value (value) with such prominent representatives in Spain, and as many staunch defenders as detractors. Neither on the situation in China, nor on the tapering of the Fed, the energy transition (as necessary as it is high cost) nor many other aspects of the economic situation. Today we want to comment on a change in behavior that affects investors across the board, now that the word is so fashionable, and how it affects financial markets.
The irruption of the Internet has been around for decades, it has transformed many traditional industries from top to bottom and is only just beginning in the transformation of financial services, due to its obvious advantages in terms of immediacy, comparability, ubiquity, improvement and democratization of the offer. low costs and many other benefits that we all enjoy on a daily basis.
In this way, all over the planet and also, of course, in Spain, the new digital players have done a great job, leveraged on these new technologies, democratizing and making available to everyone, whatever their economic profile, Savings and investment tools and services that were previously only available to large wealth, allowing better and more profitable investments.
However, all light generates shadows, and comparability and immediacy have generated a problem that projects new challenges, especially in the way of saving and investing for small and medium savers and especially for native digital generations.
The comparability and immediacy generates collateral effects or, to be more precise, externalities, of very high expectations of immediate returns, investment in products and services in which it is not possible to have previous experience, the massive use of new non-professional information sources that generate gregarious behaviors, the monitoring of non-professional actors in scattered social networks or off the radar of the authorities or the appearance of gamification models for investment based on immediate reward behaviors.
All this clearly challenges traditional regulatory models, as we have seen with the case of Robin Hood and GameStop or the prohibition of the American SEC to the development of certain services to Coinbase. New challenges of security, privacy, privileged information, manipulation … erupt, difficult not to follow, but even to be understood by both regulators and traditional entities, since they challenge the linear and structured competitive model that has prevailed in financial services since the beginning of the 20th century and that technological disruption is convulsing.
Savings products must cover future needs with the sacrifice in today’s spending
It is obvious that, above all, we must pursue the adaptation of savings and investment products to their objectives of generating wealth and assets, that is, they must serve to cover future needs with the sacrifice in today’s spending. The current regulatory models for defining the adequacy of investment financial services in Europe, the well-known profiling, must respond to three aspects: knowledge and previous investment experience, investment objectives and financial situation.
These three factors, together with subjective risk tolerance, define the profile of each person and therefore what savings and investment products can and should be offered to a specific client. Well, an important part of these factors that, let’s not forget, measure the suitability of an investment for a client,
For all the above, we want to send a message of the need for a joint and collaborative effort in three lines of action from all the parties involved. First, promote financial education. Second, to generate the conditions to exploit the enormous benefits of the digital environment and perhaps most importantly, to channel all this new environment in a responsible and ethical way and responding to its real objectives of building sustainable wealth.