The wealth-management industry, before technology came on the scene, did a good job of serving two constituencies: rich people and those of modest means.
The former is obvious. Wealthy individuals and their families have complicated financial needs that are well met by expensive advisors, who bring investment prowess and tax fluency. Counterintuitively, perhaps, those with little wealth have the opportunity of investing simply, wisely, and cost-effectively through low-cost mutual funds offered by the likes of Vanguard and Fidelity. They don’t get much, but they don’t need much either. And what they get is good.
The group that’s gotten the shaft is what the fund-management industry calls the “mass affluent.” They are rich enough to have options for their investments—which they typically screw up by following the advice of too many charlatans eager to separate them from their money—and are too poor for wealth managers to profitably offer them guidance.
This leads us to the latest installment of how software changes everything. A new crop of so-called “robo-advisors” is good news for the mass affluent and those who aspire to become so. These are new companies and products that manage wealth by algorithm, thus combining low cost and—this part is key—prudent decision-making.
Until now a bevy of startups have dominated the fledgling field, and they have cleverly focused their efforts on millennials, they of little but growing wealth and a proclivity to live digitally. Fortune’s Jonathan Chew paints the landscape well in a feature in the current issue. The way you know the startups are onto something is that now giants like BlackRock and Charles Schwab are getting into the act.
Robo-advisory is a nascent field, and its business impact so far on the big fund managers is negligible. But it’s one of those things that just plain makes sense. It gives people of some means a way to use technology to manage their money far better and in a more disciplined fashion than they’ll ever do themselves. If like many people you feel insecure about how you’re managing your investments, check out the new possibilities. You won’t even have to tell the software thank you.
BITS AND BYTES
Europe embraces strict new privacy law. After years of debate, the European Commission agreed Tuesday on new regulations that require businesses to be far more transparent about how they collect and use personal data. The fine for breaking the law is steep—up to 4% of the infringing company's worldwide revenue. The new rules, which still must be approved by individual member nations, also allow E.U. countries to raise the online age of consent from 13 to 16. (Ars Technica)
Microsoft creates dedicated philanthropic arm. Facebook and Salesforce are pretty transparent about their efforts to "give back," but now Microsoft is getting more vocal about it. Its new organization, Microsoft Philanthropies, consolidates and expands the company's existing charitable programs. Its holistic focus will be on "digital inclusion" initiatives such as affordable Internet access and widely available computer science education. (Official Microsoft Blog)
Apple opens secret lab in Taiwan. The facility, an hour's drive from where manufacturing partner Foxconn is located, is dedicated to display technology research, reports Bloomberg. The focus is on making smartphone and tablet screens thinner. (Bloomberg)
Google CEO: India is proving ground. If you want a hint about what Alphabet's Internet division is planning, watch its experiments in this developing economy. India is especially good for testing how mobile services adapt when wireless connectivity is limited or unreliable, according to remarks made by Sundar Pichai during a speech Wednesday in New Delhi. (Reuters)
Former Cisco star champions electric cars. Padmasree Warrior is the new U.S. CEO for China's NextEV, a would-be competitor to Tesla. She was previously Cisco's top technology and strategy executive, but decided to leave earlier this year when Chuck Robbins succeeded her mentor John Chambers as Cisco's CEO. (Fortune)
British police arrest tech-toy hacking suspect. A boastful hacker last month stole personal information for millions of children and adults—including social security data and photos—by breaking into an online app store and education site managed by China's VTech. The extent of the breach is still unknown, but the company faces a class-action suit by U.S. consumers. (Fortune)
Apple-IBM alliance reaches milestone. Roughly 18 months into their partnership, the two companies have released more than 100 mobile business apps, many of them industry-specific. Apple is trying to boost corporate adoption for iPhones and iPads, while IBM wants more customers for its cloud services. (Fortune)
Facebook takes on Angie's List. The social network has launched a portal where people can search for local businesses—ranging from car dealers to plumbers—based on Facebook reviews by others in their community. The initiative is in direct compeitition with services offered by Angie's List and Yelp, among others. (Wall Street Journal)
This is the biggest gripe people have about field service visits. Picture this: Your family is packing for an end-of-year getaway. With three days to go, the washing machine goes on the fritz. You’re lucky enough to schedule a next-day repair, carving four hours out of your schedule to await a technician. He or she arrives on time, only to discover the repair requires a part that’s not on site—and forcing someone in your household to set aside four hours for a second visit.
If that scenario is a major pet peeve, you’re far from alone. The inability for a repair technician to resolve a problem during the first visit rates as the most common reason people were dissatisfied with a recent service experience, according to a recent survey by software company ServiceMax. Here's why smart sensors connected to the Internet could be the antidote. (Fortune)
MORE FORTUNE TECH COVERAGE
China's Xi spreads censorship ideals at Internet conference
by Scott Cendrowski
Slack starts $80 million app investment fund by Heather Clancy
Smartphone screens may be getting cheaper, thinner by Hilary Brueck
New Mac data breach exposes usernames, passwords by Don Reisinger
Pebble finally adds activity tracking to its smartwatches by Jason Cipriani
This company is buying a ton of batteries from LG for the power grid
by Katie Fehrenbacher
How Netflix video will soon use less data by Kif Leswing
Google promises to rein in runaway query costs by Barb Darrow
Ford's self-driving car experiment is coming to California
by Kirsten Korosec
ONE MORE THING
Apple's unusual holiday bonus. It's giving every employee a free nine-month subscription to its new streaming music service. Plus headphones to keep things quiet for the rest of us. (Fortune)
This edition of Data Sheet was curated by Heather Clancy: